1 00:00:01,840 --> 00:00:05,040 Speaker 1: The Rural Report on hither do for see allan drive. 2 00:00:05,240 --> 00:00:07,600 Speaker 1: Jamie McKay, host of the Countries with us, say, Jamie 3 00:00:08,119 --> 00:00:10,000 Speaker 1: cod I hear that. Okay, talk me through what's going 4 00:00:10,000 --> 00:00:12,400 Speaker 1: on with the lions right well? 5 00:00:12,480 --> 00:00:15,360 Speaker 2: The meat industry's worst kept secret was let out of 6 00:00:15,360 --> 00:00:19,280 Speaker 2: the bag this morning, so meat posts of the Alliance Groups. 7 00:00:19,280 --> 00:00:23,159 Speaker 2: There's Irish based company Dawn Meats is lining up to 8 00:00:23,200 --> 00:00:26,079 Speaker 2: pay two hundred and fifty million dollars for a sixty 9 00:00:26,120 --> 00:00:29,320 Speaker 2: five percent steak in the meat co op. Remember, Heather 10 00:00:29,360 --> 00:00:32,440 Speaker 2: that the Alliance Groups the only fully owned or fully 11 00:00:32,479 --> 00:00:35,199 Speaker 2: farmer owned, one hundred percent cooperative in the meat industry, 12 00:00:35,280 --> 00:00:38,440 Speaker 2: or certainly that I know of. Anyhow. It is based 13 00:00:38,440 --> 00:00:40,880 Speaker 2: out of Inbicargo, but it's got plants in the North 14 00:00:40,920 --> 00:00:44,800 Speaker 2: and South Island at Disney, Zealand's biggest sheep meat exporters, 15 00:00:44,840 --> 00:00:49,280 Speaker 2: Silver Fern Farms is our biggest meat processor enterprise. Or 16 00:00:49,360 --> 00:00:52,680 Speaker 2: this deal values the enterprise at five hundred and two 17 00:00:52,840 --> 00:00:54,880 Speaker 2: million dollars. Now what are they going to do with 18 00:00:54,920 --> 00:00:57,080 Speaker 2: their two hundred and fifty million dollars? Were they going 19 00:00:57,120 --> 00:00:59,800 Speaker 2: to use most of it? It would seem to pay back. 20 00:01:00,200 --> 00:01:03,520 Speaker 2: They're going to accelerate the capital expenditure program. Some of 21 00:01:03,520 --> 00:01:06,920 Speaker 2: it will go to farmer shareholders. Just how much will 22 00:01:06,959 --> 00:01:09,920 Speaker 2: be interesting and how it affects their share value will 23 00:01:09,959 --> 00:01:15,119 Speaker 2: be interesting as well. The board unanimously endorsed the deal. 24 00:01:15,800 --> 00:01:18,600 Speaker 2: Other suitors there were other suitors. Apparently there were three. 25 00:01:18,920 --> 00:01:21,800 Speaker 2: They got down to three. I think I'm reading between 26 00:01:21,840 --> 00:01:24,080 Speaker 2: the lines there. I think Silver Fern Farms might have 27 00:01:24,120 --> 00:01:27,360 Speaker 2: been close. Of course, that's the other big meat company 28 00:01:27,360 --> 00:01:30,760 Speaker 2: in this country, fifty to fifty joint venture with the Chinese, 29 00:01:30,840 --> 00:01:35,240 Speaker 2: now bought by Shanghai Mailing a decade ago. And interestingly, 30 00:01:35,840 --> 00:01:39,240 Speaker 2: Dawn Meats was understood to have been the underbidder to 31 00:01:39,319 --> 00:01:43,399 Speaker 2: that offer in twenty fifteen sixteen. So we need shareholder 32 00:01:43,400 --> 00:01:46,840 Speaker 2: acceptance obviously, Heather. If they don't get it, what are 33 00:01:46,880 --> 00:01:50,320 Speaker 2: the options for the Alliance Group then asset sales, site 34 00:01:50,320 --> 00:01:54,200 Speaker 2: closures we've already seen Smithfield in Timaru, and further cost 35 00:01:54,280 --> 00:01:57,240 Speaker 2: cutting initiatives. And just to give you some idea about 36 00:01:57,320 --> 00:02:00,760 Speaker 2: Dawn Meats who they are family owned Irish company founded 37 00:02:00,920 --> 00:02:04,800 Speaker 2: in nineteen eighty core and you'll turnover a five point 38 00:02:04,960 --> 00:02:08,280 Speaker 2: eight billion compares to one point eight billion. That's New 39 00:02:08,360 --> 00:02:12,320 Speaker 2: Zealand dollars for the Alliance Group, whose turnover has been 40 00:02:12,320 --> 00:02:16,720 Speaker 2: slipping in the past few years. So interestingly the final 41 00:02:16,760 --> 00:02:19,600 Speaker 2: point old mat makers. The Alliance Group has come in 42 00:02:20,000 --> 00:02:23,240 Speaker 2: for a fair bit of flack in recent years or 43 00:02:23,280 --> 00:02:26,880 Speaker 2: seasons because, as the only one hundred percent farmer ow 44 00:02:27,000 --> 00:02:31,000 Speaker 2: meat process and co op, it's been accused of uncooperative 45 00:02:31,040 --> 00:02:35,600 Speaker 2: sweetheart deals for largest suppliers and third party traders. See 46 00:02:35,600 --> 00:02:38,800 Speaker 2: if you pay if your supply Fonterra, for instance, heather 47 00:02:39,280 --> 00:02:42,880 Speaker 2: or zespery, you get the same no matter whether your 48 00:02:43,000 --> 00:02:46,120 Speaker 2: milk or kiwi fruit comes from Northland or Southland. Not 49 00:02:46,160 --> 00:02:48,720 Speaker 2: that we grow keywy fruit in Southland just yet, not. 50 00:02:48,720 --> 00:02:50,280 Speaker 1: Yet, not yet. But if we carry on with this 51 00:02:50,360 --> 00:02:52,359 Speaker 1: climate change in the coal for long enough, you will 52 00:02:52,400 --> 00:02:54,920 Speaker 1: be talk to me about bn zen. Why are they 53 00:02:54,960 --> 00:02:55,959 Speaker 1: feeling so confident? 54 00:02:56,960 --> 00:03:00,400 Speaker 2: Ah, well, they've they've led the charge the for their 55 00:03:01,360 --> 00:03:04,000 Speaker 2: forecast milk price for the twenty five to twenty sixth season, 56 00:03:04,280 --> 00:03:07,680 Speaker 2: they've lifted it seventy five cents to ten dollars twenty five, 57 00:03:08,040 --> 00:03:12,760 Speaker 2: remembering Fonterra started with a pretty a pretty bullish forecast 58 00:03:12,760 --> 00:03:16,520 Speaker 2: milk price themselves at ten dollars, albeit at their midpoint 59 00:03:17,240 --> 00:03:20,519 Speaker 2: wasn't exactly in the middle because their price forecast range 60 00:03:20,560 --> 00:03:25,440 Speaker 2: was from eight to eleven dollars. Now GDT, last week's 61 00:03:25,520 --> 00:03:29,400 Speaker 2: GDT will have probably buoyed the ben Z a wee 62 00:03:29,440 --> 00:03:33,360 Speaker 2: bit here. Interestingly, the futures market's called its heels a 63 00:03:33,360 --> 00:03:36,520 Speaker 2: wee bit, But this afternoon, when I last checked, the 64 00:03:36,640 --> 00:03:40,000 Speaker 2: twenty five twenty six futures market was trading at ten 65 00:03:40,080 --> 00:03:43,280 Speaker 2: dollars sixteen, down from ten twenty three. If we get 66 00:03:43,280 --> 00:03:46,720 Speaker 2: another ten dollars payout, hallelujah, praise the Lord, because we're 67 00:03:46,720 --> 00:03:49,160 Speaker 2: going to get one for the twenty four to twenty 68 00:03:49,200 --> 00:03:53,280 Speaker 2: five season that will be decided by Fonterra anyhow in 69 00:03:53,440 --> 00:03:54,760 Speaker 2: September or October. 70 00:03:54,920 --> 00:03:57,560 Speaker 1: Brilliant stuff, Jamie, Thank you so much, Jamie McKay, host 71 00:03:57,600 --> 00:03:58,200 Speaker 1: of the Country. 72 00:03:58,840 --> 00:04:02,040 Speaker 2: For more from Heather Dooplasye Allen Drive, listen live to 73 00:04:02,120 --> 00:04:05,160 Speaker 2: News Talk Set B from four pm weekdays, or follow 74 00:04:05,200 --> 00:04:06,960 Speaker 2: the podcast on iHeartRadio.