Should NF be successful in acquiring Dairy Farmers, it is proposed that NF and WCB will form a joint venture to run the existing cheese business of Dairy Farmers.

Key aspects of the current cheese joint venture proposal are:

* it will be jointly owned and operated by NF and WCB;

* its operations will be limited to the current cheese brands, production, conversion and wholesale activities of Dairy Farmers;

* WCB will supply the cheese joint venture with the majority of its requirements for bulk cheddar cheese; and

* NF will market and wholesale joint venture product in Australia.

However, the process is still at a preliminary and non-binding stage and there can be no guarantee that an acquisition will occur.

National Foods managing director, Ashley Waugh, says the joint venture proposal brings together complementary skills in the form of brand management, sales and marketing skills from National Foods, and efficient cheese manufacture skills from Warrnambool.

WCB chief executive officer, Neil Kearney, says Dairy Farmers "provides an exciting opportunity for WCB to significantly expand our interest in cheese".

"This includes exposure to the Coon, Cracker Barrel and Mil Lel brands," he said.