Dramatic and positive change is needed now

Meat Industry Action Group

Media Release

For Immediate Release

20 September 2007

“If you won’t try to fix the problems in the meat industry, then it’s time you stepped aside and let someone who will.” That is the message from the Meat Industry Action Group to Alliance Group and PPCS directors.

“We’ve had enough. Dramatic and positive change is needed now.”

The fact that Alliance Group directors have fobbed off the recommendations of the PriceWaterhouseCoopers report has proved to be the final straw for the group.

Chairman Mark Crawford said his group was both angry and disappointed at the outcome of the meetings between PPCS and Alliance Group.

“It’s time for action. We’ve tried working with the Alliance directors but we’ve got nowhere. It’s now time for farmers to show their strength, and very soon, it will be time for farmers of both Alliance and PPCS to make their vote, or proxy, count.

Mr Crawford said the group is now seeking legal advice on the best way forward and has meetings planned with farmers in the next few weeks to consult with them and seek a mandate.

Status Quo

“The Alliance directors’ failure to deliver some of the benefits highlighted in the PWC report, is the final straw. It is sending a message to farmers that the status quo is acceptable. It is not.

“Nor is continuing with procurement wars and third party traders.

“It is time the company treated their shareholders equally and with trust, respect and loyalty. Their first step must be to immediately drop the special deals for larger suppliers and stop using third party traders.

“Alliance is a co-operative – all shareholders must be paid the same price for their stock.”

“The second step is to allow shareholders to see a summary of the PWC report. We have demanded that they do this within two weeks.”

Mr Crawford said Alliance’s insistence on continuing with third party traders is holding back any progress they and PPCS could be making on joint marketing ventures.

Time for action

MIAG Vice-chairman and South Canterbury farmer John Gregan said the Alliance directors need to justify their inaction … so far they have done an inferior job.

“They have shown they have learnt nothing. Neither the poor prices of last two seasons nor the record numbers of sheep farmers leaving the sheep industry, which will put Alliance Group seriously at risk, seems to have made a difference.”

“If the directors aren’t prepared to make the hard decisions, we are prepared to take matters into our own hands.”

Mr Gregan said his group has the support of farmers. Farmers have had enough and have been pushing MIAG to call for complete change, especially within Alliance Group.

“We believe that dramatic change is vital and we believe that with farmer support we will be able to make that change happen very soon.”

ENDS

Background:

PWC:

Alliance Group and PPCS engaged PriceWaterhouseCoopers to do an appraisal of the two co-ops’ operations to evaluate potential options to improve livestock returns paid to farmer suppliers.

MIAG:

The Meat Industry Action Group was formed in April 2007, in reaction to the chaotic state of NZ's meat industry. At that stage a similar group, the Meat Industry Restructuring Group, was already operating and trying to get change within the industry. Many of the country's sheepfarmers were failing to make a profit as a result of the poor lamb prices being paid by the meat companies.

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