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.
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By GlobalData“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.
