Proposal to blend existing meat co-operatives

John McCarthy.
John McCarthy.
Meat Industry Excellence chairman John McCarthy has scotched a suggestion the organisation will unveil a plan for a new export meat co-operative this week.

''We're not. We need another meat company like we need a hole in the head,'' Mr McCarthy said yesterday, following a media report earlier in the week.

Rather, MIE had been ''conceptualising'' around a proposal which was ''entirely consistent'' with what it always wanted to do, which was to blend the two co-operatives, Alliance Group and Silver Fern Farms, he said.

The proposal, dubbed NewCo, was in the concept stage and he did not want to say too much about it as MIE needed to ''drill down'' on detail with the chairmen and boards of the two co-operatives, he said.

MIE had been in discussions with ''one of New Zealand's largest banks'' and had a letter of support from it for the total principle of a blended operation, he said.

Mr McCarthy had ''no doubts'' the sheep and beef industry could outperform dairy if NewCo went ahead.

After two and a-half years of ''living and breathing'' red meat, his conclusion was that ''tinkering around the edges'' was not going to change anything.

Change needed to be led by the co-operatives and the co-operatives needed to be given a message that change was a ''must have'' by their shareholders.

Asked whether a Fonterra-type model was still suitable, given the current situation in the dairy industry, Mr McCarthy said there had been an over-reliance by Fonterra on China.

To say Fonterra had crashed and burned was not a reason to not try to turn the meat industry around, he said.

Dipton farmer and MIE executive member Peter McDonald said NewCo was about combining the best of both Alliance Group and Silver Fern Farms ''while leaving behind the worst''.

MIE believed the leadership of both co-operatives had the opportunity to transform the red meat industry from procurement-focused to ''truly market-focused''.

The co-operative model must endure. Southern farmers operated in an unforgiving environment which made them vulnerable, and they had to have control of the processors and therefore the value chain, Mr McDonald said.

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