The Indonesian-owned company has a small number of suppliers in northern Victoria.
Suppliers have told Country News they are worried by a lack of information coming from the company and irritated by differing explanations for the delay.
The company attracted new suppliers last year with the promise of payments above what the bigger processors were offering.
While suppliers have indicated they were happy with the new company, their confidence has taken a beating due to the delay in payments for February’s milk.
Frestine chief operating officer John Best has apologised to suppliers.
“I fully recognise that this has placed real, emotional and financial strain on many of your farms and businesses, and I am truly sorry for that,” Mr Best wrote in a circular.
“We take our obligations to you seriously. Frestine is committed to paying every supplier in full for February, and for all milk delivered in March and thereafter.
“We understand that some suppliers have incurred additional financing costs because of the delay; we will compensate for any extra financing charges incurred from March 15 relating to the February late payment.”
Mr Best described the cash flow situation as being a little tight due to some delays in local and export orders being despatched.
The company purchased the Deldi Holdings Ferraro Dairy Foods Tullamarine cheese processing plant in May last year.
Frestine did not answer calls by Country News on Thursday.
16°C