Alliance meat company's upcoming annual result eyed for wage subsidy court action

Alliance Group is under fire for accepting the wage subsidy. Photo / Getty Images

The man hoping to take a private court prosecution against Alliance Group directors over the repayment of only part of a $34.3 million Covid-19 wage subsidy may seek longer to produce evidence so he can include the meat company's November annual result.

Professional campaigner Simon Lusk said an Invercargill district court judge had given him until October 23 to provide evidence to justify a trial for his proposed prosecution of longer term Alliance directors, chairman Murray Taggart, and independents Sarah Brown, Peter Schuyt and Graeme Milne.

Lusk, who said he has independently filed charging documents in the court and is not working for anyone, may seek an extension to that date until Alliance's FY20 financial results are published which should show if the company experienced the actual or projected 30 per cent fall in revenue needed to qualify for the wage subsidy.

An Alliance spokesperson said the results for the year to September 30 would be published "on or around November 19".

Alliance, a farmer-owned cooperative, said earlier this month it had repaid $17m of the wage subsidy it had claimed. A spokesman has since revealed it made a repayment of $1.3m before this.

Lusk said Alliance appeared not to fit the eligibility criteria for the wage subsidy.

"The wage subsidy was for companies had an actual or projected fall in revenue of more than 30 per cent. They were an essential service that continued to operate during the lockdown.

"They either have a fall in revenue of more than 30 per cent in which case they are entitled to keep the entire amount - or they have not had a fall in revenue of more than 30 per cent and they should pay back the entire amount.

"There is no criteria where you can pick and choose how much of the subsidy you keep.

"They may be able to justify doing so (part repayment), but they may not and it is important that an impartial referee (the court) adjudicates."

Alliance chairman Taggart has said Lusk's court filing is "spurious and unfounded".

"Alliance Group predominantly processes sheep and the nature of our processing means we were more severely affected by the Covid-19 operating restrictions than other companies," he said.

Taggart said the company had been open and upfront about the wage subsidy.

"We have been in ongoing discussions with the Ministry of Social Development about the application of the subsidy and stated from the outset that we would return any funds not used to pay people. In line with that commitment, we have returned $17 million of the subsidy."

Alliance wasn't the only meat company to claim large wage subsidies.

The taxpayer-funded subsidy programme paid around $111m to meat companies, a sector deemed an essential service and allowed to keep working in lockdown.

The meat industry reported record export sales this year.

The largest meat company claimants were Silver Fern Farms, paid $43.2m for 6161 employees, Alliance Group, which received $34.3m for 4913 staff, and the Anzco group of companies which got $17.3m for 2478 employees.

Silver Fern Farms repaid the subsidy in full in July.

Herald inquiries suggest the wage subsidy was claimed for around 13,500 of the meat industry's estimated 22,000 employees.

Several smaller meat companies also claimed the subsidy.

But some large industry players did not. They included Affco, Greenlea and Hellaby, which between them employ more than 6000 people.

Alliance posted a before-tax profit of $20.7m for FY19. Silver Fern Farms, half owned by Shanghai Maling (Hong Kong) and half by a New Zealand farmer co-operative, announced a $70m net profit for FY19. Japanese-owned Anzco posted record revenue of $1.7b and a net profit after tax of $22m. Operating cashflow was $140.7m.

Chairman Taggart is elected by Alliance farmers and has been on the board since 2010.
Independents Brown, Milne and Schuyt joined in 2018, 2013 and 2017 respectively.