12 Nov 2012

Meatworkers' union predicts more heavy losses

6:19 pm on 12 November 2012

The meatworkers' union expects more meat companies to announce heavy losses for the past year.

The prediction comes after Alliance, New Zealand's biggest sheep meat processor and exporter, posted a net loss of $50.8 million for the past year.

Another southern meat company, Blue Sky Meats, has reduced wages and cut 70 jobs after recording a $600,000 loss in what it has described as its most disappointing financial year.

Alliance says it and other meat companies failed to respond fast enough to falling demand in economically troubled overseas markets and paid too much for livestock.

The persistently high New Zealand dollar also undermined export returns.

Alliance has stopped processing sheep meat at its Mataura plant in Southland in response to declining sheep numbers.

Earlier this year, it closed its Sockburn plant in Christchurch where it processed cattle, deer and pigs and did some lamb cutting.

New Zealand Meat Workers and Related Trades Union national secretary, Graham Cooke, says declining sheep numbers are not just affecting the meat companies, but also workers' incomes.

Mr Cooke says many meatworkers are paid by the piece and there is not enough stock to keep them going eight hours a day, five days a week.

"A lot of workers are working on the weekly minimum or they're being laid off for a couple of weeks and being brought back for a couple of weeks. It is a real concern"

Mr Cooke says the New Zealand meat industry has a nucleus of very good companies, but lacks the leadership to change its behaviour.

"The silly part about it is, meatworkers are increasing their productivity, because the lambs every year are getting bigger and bigger, so that means the companies are getting productivity out of the workers.

"And yet, our workers are not getting pay increases - they're actually getting pay cuts because of the over-capacity."

Alliance initiative

Meanwhile, Alliance chief executive Grant Cuff says it has had a good response from farmers to a new stock- buying initiative that it is trying.

"The principal change has been to offer a $20 per lamb advance payment to those suppliers that supply us 100 percent of their product. Secondly, the 100 percent shareholder suppliers will be advantaged in any contracts that we put out."