Alliance bullish on meat

Alliance Group expects to pay shareholders $15 million in rebates this year, within the $10 to $20 million annual historic range.

Speaking to about 100 shareholders in Milton yesterday, chief executive Grant Cuff said the rebate payment was over and above its yield quality premiums paid for lambs which met its yield target.

In a low-key meeting, Mr Cuff was bullish about prospects for sheepmeat, beef and venison, saying markets were generally strong, the world wanted our meat and the only blight on the horizon was the exchange rate.

At current levels of over $US65c to the New Zealand dollar, Mr Cuff said January to March prices for all three species would be about 10% less than last season.

Alliance chairman Owen Poole said the company would be meeting suppliers to its two North Island meat works in coming weeks and inviting them to become shareholders.

They company bought its first works at Dannevirke in 2003 and had just three North Island shareholders.

He said the approach was designed to get a commitment to the company from its other suppliers, while the capital injection "would be useful".

Mr Poole also canvassed the opinions of shareholders about a report on the meat industry by the Ministry of Agriculture and Forestry, a report he said Alliance had concerns with.

He said the report did not address the impact of Government policy on the industry, such as the Holidays Act, Biosecurity and the looming emissions trading scheme.

The report labelled the meat industry as "systemic under-performance", a view Mr Poole said was "harsh and inaccurate".

The reality was that meat was a competitive primary industry given Fonterra and Zespri had, or virtually had, monopolies in their industries.

The Maf report also said co-operatives did not accurately reflect share value, unbundle returns or have enough capital to reinvest in the company, points Mr Poole also took exception to.

He said that four times in the past nine years Alliance had issued bonus shares at no cost to shareholders which reflected the appreciating value of the company, and it had invested heavily in the company.

Mr Poole said the report would be discussed by politicians and industry leaders and he said there needed to be an appreciation that Alliance did everything a listed company did.