NZ merger considered

- Published: 29 June, 2007

The two big New Zealand meat co-operatives are reported to be considering a merger.

Local reports claim that PPCS and Alliance appear to be bowing to pressure from farmers and have engaged PricewaterhouseCoopers to study their operations "to evaluate potential options to improve livestock returns paid to farmer suppliers of each company".

The two operations together would have a NZ$3.1bn turnover, 33 processing plants and would represent 59% of sheepmeat exports, 37% of beef and more than 70% of venison.

Both co-operatives would require 75% of members to back a merger, if that is recommended.

The two chairmen, John Turner of Alliance and Reese Hart of PPCS, said that to ensure New Zealand received the best value for its meat exports, "Alliance and PPCS see a need for change, extending from suppliers at farm gate through to sale in offshore markets".

The news follows on the recent difficulties with low prices for sheepmeat both in the UK and internationally and sheep farmers have been calling on the two co-operatives to work closer.

PPCS and Alliance said the report by PWC was expected to take a couple of months and an assessment of the options would then take place.

Neither company would comment further till the appraisal and reviews had been completed.