Unanimous shareholder support for mega company

Central Otago's Alliance Group shareholders unanimously support the concept of pursuing a meat mega company.

About 50 farmers from throughout the district attended the eighth and last shareholder meeting about the proposal, held in Alexandra yesterday.

Earlier meetings in Invercargill, Gore, Milton, Timaru, Oamaru, Christchurch, and Nelson, generated widespread support for the initiative, which was aimed at reducing fragmentation within the company.

Alliance Group chairman Owen Poole, of Wanaka, told the meeting yesterday that only one Nelson farmer was opposed to the concept, which would put farmers behind the steering wheel of the business.

‘‘There are three non-negotiables with this concept. It needs to be farmer-controlled if not owned, farmer-driven, and there can't be less than 80% market share for sheep meats,'' Mr Poole said.

Almost an hour of discussion about the initiative followed a short presentation on the logistics of the mega company.

Of those present at the meeting, about six asked questions mainly concerned with the operation of the mega business in hypothetical scenarios of the future.

Roxburgh farmer Gerry Eckhoff was reluctant to believe the concept would solve the meat industry's problems, although he supported the idea in principal.

‘‘We need a cultural shift, not the old bulls in the paddock that we've had over the years. We need a change in attitude to make this succeed,'' Mr Eckhoff said.

Mr Poole agreed there was no shareholder cohesion within the company, and said the fragmented structure put Alliance Group in a ‘‘weak position''.

‘‘Status quo is an option, but the benefits are small. What we all want is a significant increase in returns . . . this is the only concept which will provide us with that,'' Mr Poole said.

He said the timing for a structure change had never been better, with farmers, middle companies, the Government, offshore markets, and the banking community all ready to take advantage of the concept.

‘‘Those five major stakeholders [in Alliance Group] have to be in line to consider a change like this and, if we don't move soon, that could change for the worse,'' he said.

To work, the concept needed between $10,000 and $40,000 of additional equity per farmer, of which returns were expected to start from six months.

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