Group Horrified At Prospect Of Procurement War

Action Group Horrified At Prospect Of Procurement War

Farmers and members of the Meat Industry Action Group are horrified at the prospects and consequences of another procurement war, which is starting now.

Vice-Chairman John Gregan said the battle for lamb appears to have been instigated by the actions of one co-operative.

“Farmers know that procurement wars benefit third party traders and volume suppliers at the expense of smaller suppliers who are the backbone of these companies.

“Some farmers have declared they will not supply lambs to companies that still use third party trading and secret volume deals.”

Mr Gregan said that farmers must be treated fairly. Offering special deals is tantamount to having smaller suppliers subsidising those big enough to support themselves.

At a time when sheepmeat producers around the world are struggling, farmers realise that money and effort should be going towards marketing and market co-ordination, where the real price gains can be made.

“We believe there are other ways to rationalise the industry rather than the two co-operatives battling each other until one is dead and the other mortally wounded.”

It was this belief that led MIAG to try to broker a truce and make some progress for the industry. The group organised a meeting between Alliance Group and PPCS on neutral ground with an independent mediator. PPCS was happy to attend but Alliance refused to meet if PPCS representatives were going to be present.

Alliance then offered MIAG an opportunity to meet with Alliance directors. At this meeting little or no progress was made on the eight points MAIG presented.

Mr Gregan said both farmer co-operatives have issues that must be addressed if we are to see some sanity enter our industry.

“Alliance has issues regarding its predominate reliance on lamb and the increasing change of land use while PPCS has issues with capital restructuring and plant rationalisation.

“Shareholders need a vision that shows directors have a clear path to steer our co-operatives through these issues to prosperity.

“The current vision shows all the hallmarks of last man standing and there is no guarantee that either of our co-operatives will survive this war.”

After reporting their progress to farmers in Southland late this week, MIAG has been given a mandate.

“Farmers have suggested we endorse and support candidates for both boards’ AGMs.”

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