A radical concept designed to shake up the meat industry could create one of the largest meat companies in New Zealand.
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Meat producer Alliance Group yesterday proposed creating a single industry entity through which 80% of New Zealand’s livestock will be managed from farm to market.
The meat processing and export industry is made up of large operators such as Alliance and Dunedin-based PPCS with other smaller operators.
The consolidation, to include a merger with Dunedin-based PPCS, can expect to create a company with turnover of around NZ$5bn (US$3.9bn).
Alliance chairman Owen Poole said low returns to sheep farmers in recent years were threatening the long-term viability of many suppliers.
“While the concept is bold and radical, no other initiative considered to date has the potential to deliver the level of increased returns as quickly, or sustainably, while providing a new platform towards a brighter future,” Poole said.
With many sheep farms facing a third season of losses and animals selling for less than production costs, the new concept will lift farms returns by approximately US$400m a year, Poole said.
Alliance and PPCS account for about 59% of sheep-meat, 37% of beef and 78% of venison national exports.
The concept will be discussed with shareholders before consultation takes place with the wider industry and other stakeholders.
