Acrimony between the two meat co-operatives in the South has deepened, with Silver Fern Farms asking Alliance chairman Owen Poole to stop making what it calls incorrect statements about its proposed merger with PGG Wrightson.
Silver Fern Farms (SFF) has again also asked the Alliance board to reconsider entering merger talks.
Alliance shareholders also received a second letter from the Dunedin co-operative, saying SFF was correcting statements made by Mr Poole and to add "realism" to debate about the meat industry's future.
Two weeks ago, Alliance turned down merger overtures from SFF, saying the risks outweighed the benefits, but SFF chief executive Keith Cooper said in an interview yesterday that meat companies owed it to their shareholders to at least do an analysis.
"We all owe it to our shareholders to look at all options to improve returns and insulate suppliers from future market and currency volatility."
Mr Poole said yesterday he had received separate letters from SFF and PGGW chairman Craig Norgate proposing a merger. They would be considered at a board meeting the week after next.
However, a merger between the two co-operatives would provide few additional market benefits or address overcapacity because livestock numbers were not growing, he said.
The Alliance board stood by its concerns about the SFF-PGGW merger.
"It's not our intention to engage in petty and churlish debate.
Suffice to say Alliance directors do not resile from the position and comments of our letter on August 13 to shareholders."
Mr Cooper said SFF was asked by its shareholders to respond to comments made by Mr Poole at meetings of his shareholders about the merger and the state of SFF.
"We have requested Alliance to stop quoting incorrect figures and they have maintained a position of continuing to do it, so we had no choice," he said.
Mr Poole said in an interview the debate was about company ownership and industry structure.
"This debate is about farmer ownership and control, value creation for the wider industry, the introduction of third parties into co-operatives as an equity partner and at procurement level and appropriate aggregation options."
He described SFF writing to Alliance shareholders as an "unusual and highly aggressive approach".
SFF has taken exception to Mr Poole's comments that a merger with PGGW would not lead to industry consolidation, would compromise farmer ownership, control and financial returns, and that SFF was playing catch-up with its plate-to-pasture strategy.
The Alliance chairman has also made comments about SFF's financial position and the benefits of a merger with PGGW, all of which SFF chairman Eoin Garden said were incorrect.
Mr Poole repeated as recently as this week that the SFF-PGGW deal would not lead to 80% consolidation of the sheepmeat industry he believed was necessary, but Mr Cooper said it was the only proposition on the table.
Mr Garden said it was the first step.
"It is difficult to see how a merger that would aggregate 50% of sheepmeats, by Alliance's own calculation, with $3 billion turnover, can be represented as achieving no progress and not potentially be the catalyst to industry consolidation."
He said the deal ensured farmer control. He reiterated that gains from the merger were $111 million a year and that its strategy focused on customer needs and was not production based in to which the customer was then fitted.
Legal advice was that a merger with Alliance would not result in the Commerce Commission requiring the sale of South Island plants while SFF's falling share of European Union sheepmeat quota reflected problems it inherited with the 2004 purchase of Richmond and falling stock numbers.
