Meat industry consolidation seen as a fall back option

Talk of consolidation in the meat industry is being seen as a classic fall back idea discussed during tough economic times.

1000 people turned up to a meeting in Gore yesterday to look at ways of maximising what comes out of the red meat industry.

One of the ideas that came up was industry consolidation, which could involve Silver Fern Farms and the Alliance Group.

ANZ Chief Economist Cameron Bagrie says one of the main issues would be giving a supplier long-term certainty, by securing stock supply.

He says when the same idea was talked about five years ago, nothing eventuated.

"It tends to get talked about an awful lot when you're going through difficult economic times and in fact the last time we had this on the table was 2007/2008. Ironically that was drought conditions as well and it was discussed, it didn't end up getting implemented."

Mr Bagrie says a meat industry merger is easier said than done.

"Consolidation may be the endgame. There's certain merits in that but in order to go through the consolidation process, the six to seven pillars you need to get built and erected before you out the house on top of it and my preference would be to focus on the pillars."

There's a suggestion the Government's prepared to step in and help move towards industry consolidation in the meat sector.

Federated Farmers' Otago Meat and Fibre chairman, Simon McAtamney, says there were positive signs at the meeting.

"They're concerned that they're in danger of putting all their eggs in one basket and the dairy industry for the country's sake it needs a more vibrant meat industry and the indications were that the Government would be prepared to help."

He says the idea's already getting a favourable reaction among farmers.

Mr McAtamney says the move is being spurred on by younger farmers determined to have a future in the industry.


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