19 Mar 2013

Green light for red meat restructuring

2:25 pm on 19 March 2013

Meetings of farmers will be called throughout the country to gauge support for a major restructuruing of the red-meat industry after a meeting of southern farmers agreed an overhaul is needed.

The gathering of 1000 farmers in Gore on Monday almost unanimously voted for an amalgamation of meat companies and for putting at least 80% of processing and marketing into the hands of a single Fonterra-style operation.

A spokesperson for the Meat Industry Excellence Group driving the campaign, South Otago farmer Allan Richardson, says the sheep and beef sector is at a crossroads and farmers want change.

He says farmer meetings will now be held throughout the country to gauge wider support for amalgamation.

The meeting drew sheep and beef farmers from Otago and Southland, and from as far away as Hawke's Bay.

One of the organisers, Fiona Hancox, said New Zealand needs a strong sheep and beef industry to break the roller coaster in which only one or two years in ten bring good meat prices.

Central Otago farmer and former ACT MP Gerry Eckhoff told Radio New Zealand's Morning Report programme he expects meetings for farmers in the North Island to take place in the coming weeks.

Meat company representatives including the chairmen of the two big co-operatives, who also attended the meeting, indicated that companies are talking to each other about the industry structure.

A similar project for mass amalgamations failed in 2008, despite strong farmer support, when the two biggest meat processors could not agree.

Alliance Group co-operative's chairman Owen Poole assured farmers that everyone in the meat industry agrees on the need for change, but the challenge is finding the way to do it.

Mr Poole said Alliance has no argument with the concept of bringing together 80% of the meat industry's production into a single entity, because that was the basis of the mega merger plan it proposed in 2008.

Silver Fern Farms chairman Eoin Garden reinforced the message that the companies are working together to try to find a better way of operating.