KEY POINTS:
The proposed meat industry merger has failed.
A meeting between the two meat industry southern co-operatives, PPCS and Alliance Group, yesterday could not reach an agreement over forming a proposed merged entity.
PPCS raised concerns over the issue that companies include all sheep meat, beef and venison slaughter and processing facilities in the proposed merged entity and also questioned the merger process.
PPCS claims the rules had changed and merger benefits would be diluted if Christchurch based exporter ANZCO, as a condition of its support, was allowed to exclude its beef business. There was also dispute over the degree of commitment from candidate companies.
Alliance chairman Owen Poole, who has driven the merger proposal, said yesterday: "Support to advance the concept had been obtained from four meat companies, including Alliance Group." But, PPCS chairman Eoin Garden said some "potential participants" had not signed.
ANZCO chairman Graeme Harrison said his company had committed in writing but Affco chief executive Stuart Weston said while supportive, he was waiting to see if Alliance and PPCS could resolve their issues.
Bernard Matthews chairman Craig Boyce said his company had been in discussions with Poole and supported the concept "and was committed to the direction proposed".
Poole said he was disappointed plans to create an entity to procure, process and export 80 per cent of the country's meat kill had failed.
"We think it was an opportunity lost." Garden defended his stance, saying PPCS had been consistent throughout the initial discussions, but others had changed the plans by allowing ANZCO to exclude beef.
Changing the initial agreement also raised questions whether the $400 million in promised savings for farmers would be achieved.
The other stalling point was the process of valuing the companies, developing a business case and business plan.
PPCS has proposed a "co-operation agreement" designed by the industry and with an independent chairman, which Garden said would push industry restructuring rather than accepting a model driven by Alliance Group.
Affco's chief executive Stuart Weston said he was surprised PPCS had imposed conditions on the merger progressing.
"What has gazumped the process at the moment is PPCS' peculiar position. We are all scratching our heads wondering what is going on."
- OTAGO DAILY TIMES
