Alliance Group shareholders have reacted favourably to the first day of meetings with company directors to discuss the creation of a meat super group.
In statements after yesterday's Invercargill meeting, which was attended by up to 300 people, farmer lobby groups were happy about the proposal and positive about the reaction of shareholders.
The Alliance Group yesterday began a series of eight meetings throughout the South Island with shareholders seeking a mandate on whether it should initiate moves to create a giant meat company with control of 80% of the nation's sheep and beef kill, as a way to improve returns to farmers.
Meetings were held in Invercargill and Gore yesterday and are planned for Milton and Oamaru today.
The company has about 6000 supplier-shareholders. Meat Industry Action Group chairman Keith Milne has called on shareholders to support the concept.
‘‘Let's focus on the prize that we can collectively achieve by capturing more of the value,'' Mr Milne said.
Farmers would make it succeed or fail. ‘‘If you supply other companies which are standing outside this concept, talk to their reps and tell them that it could be a cold, miserable place outside the plan.''
But effective farmer representation and communication were crucial to the plan succeeding.
Natural Producers Company chairman Murray Rohloff also applauded the plan as the best option to ensure consolidation.
‘‘I would urge all shareholders to give their cooperative a mandate to proceed with negotiations,'' he said.
The Natural Producers Company was established as a commercial driver for change in the meat industry.
Mr Rohloff said there were four ‘‘cornerstone'' principles that had to be included in a merged company: Farmers had to have majority ownership, with individual shareholding dictated by committed supply of live stock; the value of shares in the company had to reflect the true worth of the company; merger negotiations had to focus on the quality of the deal, not expediency, and the highest calibre management and governance should be appointed to run the company.
AgResearch chief executive Andrew West has also lent his support, saying lamb had not failed as a product rather it was the industry structure, which could be fixed.
There were three times as many people procuring meat for companies as were marketing it, and he said a large meat processing and marketing company would allow farmers to stop selling on the spot market.
‘‘If we, as a nation, don't give sheep farmers the same chance we conferred by legal means on dairy farmers, then we will consign the meat industry to a cottage status.
‘‘This will mean New Zealand will come to rely too heavily on dairying and when dairy commodity prices fall we'll be in real trouble.''