Merger plan gets chopped by PPCS
April 18th, 2008, 7:51 pm Hobbies News
And now angry sheep farmers are preparing to %26quot;call in the troops and go into battle%26quot; in an attempt to save their ailing industry.
Alliance chairman Owen Poole said the commitment of PPCS had been fundamental in achieving the 80 percent threshold required to advance The Concept.
%26quot;Naturally Im very disappointed. There was a big opportunity here to change the (current) model and achieve higher returns on a sustainable basis.%26quot; The Concept, as it was known, had promised to deliver returns of up to $400 million a year or an extra $15 per lamb in the medium term through industry consolidation.
While it had been supported by three other meat companies, PPCS was not prepared to jump on the bandwagon.
Chairman Eoin Garden said PPCS supported the need for industry consolidation but it would not commit to the proposal because no %26quot;proof of concept%26quot; had been established.
%26quot;How exactly were we going to capture these gains of $400 million?%26quot; he asked.
Meat Industry Action Group chairman Keith Milne said he was %26quot;horrified%26quot; PPCS had rejected The Concept. %26quot;Im asking that the companies urgently commit to more talks and with mediation.
%26quot;This is urgent and crucial for the future of our industry %26mdash; we cant let it lapse,%26quot; Mr Milne said.
The Concept had received almost 100 percent support from Alliance shareholders after it was aired at roadshows throughout the South Island in late February.
And while a potential shortage of lamb meat was expected to boost returns to sheep farmers next season, it may not be enough to keep them in the industry and stem the rate of dairy conversions.
Natural Producers chairman Murray Rohloff said the PPCS board had let its shareholders down.
%26quot;Im absolutely furious. This was our big opportunity to future-proof the meat industry,%26quot; he said.
Mr Rohloff urged sheep farmers to call a special general meeting of the co-operatives.
%26quot;Its time for farmers to gather up the troops and draw up a unified battle plan. Weve got to make this happen,%26quot; he said.
Federated Farmers Southland president David Rose believed PPCS suppliers would closely scrutinise their companys decision.
%26quot;A quantum shift is needed, we cant just tinker around the edges,%26quot; he said.
Mr Rose said there was no time for egos or politics to get in the way.
Ray Forde, a sheep farmer at Dacre for 32 years, said many farmers had pinned their hopes on the merger being the start of a solution to improve prices.
%26quot;It is very disappointing. I hope that something else will be able to take place with all of them (meat companies) having their input.%26quot;
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