4 Jun 2015

Industry close to meat marketing deal

3:15 pm on 4 June 2015

Beef and Lamb New Zealand is close to reaching agreement with meat companies to set up a new joint marketing venture.

The new body, to be funded 50:50 by Beef and Lamb and processors and exporters, will promote New Zealand sheepmeat and beef in overseas markets, as well as locally.

Beef and Lamb chairman James Parsons said it had been working on the idea for two years but it was still subject to final approval by the companies and farmers, whose levies would provide half the money.

"In 2011 the Red Meat Sector Strategy was released and it had a group of recommmendations, and one of them was how we build a more collaborative marketing entity," Mr Parsons said.

"So Beef and Lamb New Zealand worked quite hard over the last few years to pull something together and it's really coming to a head now."

The venture was very much built around the country of origin concept; New Zealand as a brand was powerful, so it would be around promoting New Zealand sheepmeat and beef in key markets, he said.

Mr Parsons said there had been a strong level of interest shown by meat companies.

"Certainly well over half, based on numbers of companies, from what I understand, but there's still some panel-beating to do to get final agreement, so the Meat Industry Association is meeting next week to work through this, and basically inform Beef and Lamb New Zealand whether they're on board or not," he said.

"So we'll be awaiting with interest to see what that decision is.

"This will also shape what we put in our referendum offer to farmers, which will be happening later this year, under the Commodity Levy Act."

Mr Parsons said the initial level of funding for the new marketing body would be around $8 million, which was about what Beef and Lamb New Zealand was already putting into meat promotion.

"And then if it proves itself over time, it would be desirable to start stepping that up. Naturally, if it's delivering value back to farmers and industry, then the investment proposition would be compelling," he said.

That meant a medium-sized company paying its share based on throughput of livestock processed might be looking at between $200,000 and $400-$500,000.

For would help it buy into an $8 million marketing programme, Mr Parsons said.