1 Jul 2015

Meat co-ops pressured to merge

6:58 am on 1 July 2015

Farmer shareholders are putting pressure on the boards of both big meat co-operatives to get independent analysis on amalgamating the two companies.

Silverstream meatplant near Mosgiel.

Photo: RNZ

It reflects farmer frustration at the lack of response by the two co-operatives, Silver Fern Farms and the Alliance Group, to a report released earlier this year by the Meat Industry Excellence group.

The report identified gains of more than $400 million over five years from a merger.

A group of Silver Fern Farms suppliers started the ball rolling about a fortnight ago. They sought enough shareholder support (5 percent) to call a special meeting to ask for an independent analysis of the potential benefits and risks of amalgamation.

A group of Alliance farmer shareholders is launching a parallel move today.

Southland farmer Jeff Grant is one of the instigators.

"We've seen the position with Silver Fern Farms group seeking the 5 percent. In order to put a resolution in, we took the logical view that this was a similar case for the other co-op.

"The Alliance shareholders should have an opportunity to look at the cost and the benefits, or the implications of the possible merger, or at least some synergy in terms of the way the two co-ops operate in the future.

"The resolution really seeks for both Alliance and Silver Fern Farms boards to consider looking at a merger of a co-op entity, but along with that ... a comprehensive mitigation plan as to the risks and the benefits, and having that verified by an independent firm."

Meanwhile, the farmer group pushing for a special meeting of Silver Fern Farm shareholders expects to confirm it has the 5 percent support it needs this week.

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