16 Mar 2015

Meat industry restructure crucial - study

6:45 am on 16 March 2015

A new study of the red meat industry calculates that the financial gains from restructuring the industry could top $1 billion.

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Photo: 123rf

The study, due to be released tomorrow night, is an independent analysis commissioned by the farmer-led Meat Industry Excellence group, which is campaigning for an industry overhaul.

It concludes merging the two biggest meat companies - Alliance and Silver Fern Farms co-operatives - alone would produce gains of more than $400 million over five years.

And getting the big four - ANZCO and AFFCO, as well as the two co-ops - to agree to a co-ordinated consolidation process could mean savings of more than a billion dollars.

The analysis shows that the meat industry has more than twice the capacity it needs to process the annual lamb and beef production.

MIE chairman John McCarthy said the study backed the group's argument that sticking with the status quo was not an option.

"We've lost 3000 sheep a day from this sector since the 1990s.

"If you extrapolate that trend line, it's entirely feasible that we'll be down to 15 million sheep in 10 years. Then you start to lose critical mass.

"I think it is in the national interest to have a strong red meat sector and it makes no sense when we've got a world that's crying out for quality protein that we have 30 to 40 exporters competing in the overseas market selling the same product and they're only competing on price."

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