COMMERCIAL Borthwick’s to sell C.F.M. meat

Press, Volume CXII, Issue 33047, 14 October 1972, Page 20

COMMERCIAL Borthwick’s to sell C.F.M. meat

(By our commercial editor) Thomas Borthwick and Sons, Ltd, will take over with immediate effect the marketing of ail the kill from the Canterbury Frozen Meat Company, Ltd, for which C.F.M. has not entered into commitments.

But the recently formed joint company, Japan Overseas Inc., will continue as a separate entity; also, as the operator of the combined Belfast works, C.F.M. will be responsible for the sale of all processors perquisites, such as tallow and casings. The pools scheme will continue to play a major role in C.F.M.’s system for lamb disposal, and the other options will remain open to C.F.M.’s clients. It is understood that the departure for London of the chairman of C.F.M. (Mr H. H. Elworthy) and the general manager (Mr D. Morton) in is connection with the change in the company’s marketing operations. Referring to the rationalisation now possible between the two Belfast works, Mr Elworthy says in a ciricular ( letter to shareholders that plans are now in hand to build a new beef house at the C.F.M.’s Belfast works, and that all beef and pig killings will probably be undertaken there. All sheep and lamb killings will be done at the Borthwick works. It is cheaper to carry out a joint modernisation and hygiene requirement programme than to undertake separate programmes, says Mr Elworthy. He adds that separation of the mutton and beef operations will eliminate the possibility of restriction of one operation because of the failure of the other to meet hygiene requirements, as could be the case when both are undertaken in one works. The circular has very little to say on marketing operations. “As we are still awaiting official consent, certain as-

pects of the negotiations i must remain confidential at this stage,” says Mr Elworthy. Actually, although the longjterm benefits from this deal are obvious, a reduction in processing charges cannot be expected immediately. No-one would probably be able to judge better who is best able to handle New Zealand meat than the chairman of the New Zealand Meat Producers’ Board (Mr C. Hilgendorf). Because of the board’s involvement in the marketing of meat in the last season, the board has been able to evaluate the performance of the various companies. In a telephone interview with “The Press” Mr Hilgendorf said that there were two good things about the proposed association of the two companies — it should reduce total killing charges in Canterbury and it should improve the marketing of Canterbury meat. The board saw it as improving the efficiency of the processing part of the industry in the province. If it was true that Canterbury Frozen Meat Company meat would be marketed by Borthwick’s, the board would regard this as leading to better marketing by a company which over the years had had difficulty in deciding how best to market its meat. The board felt very strongly

that the marketing methods of New Zealand processing companies must be improved for the benefit of New Zealand as a whole, and farmers in particular, and he believed that the C.F.M.-Borthwick’s association would be a move in that direction. Questioned as to whether the board had any fears about more New Zealand meat being handled by overseas interests, he said that in fact in the last 10 years the amount of meat in the hands of overseas companies had dropped from about 70 per cent to about 50 per cent. The board would not like to see Borthwick’s with a greater than 20 per cent

shareholding in C.F.M., but apart from that “it sees nothing but good in the whole operation.” “The board hopes that this will lead to further rationalisation among other South Island companies,” said Mr Hilgendorf.

The C.F.M.-Borthwick arrangement was not the perfect solution as far as the board was concerned, but since another solution did not appear to be possible, then the board regarded it as being a good thing, he said in a reference to negotiations which were instituted late last year among a group of South Island companies directed to both rationalisation in processing and strengthening of marketing.

The rationalisation of the meat industry in Canterbury was absolutely vital and if this was the best, or the only way in which it could be achieved, then he believed it must be for the benefit of meat producers in this area, said the chairman of the meat and wool section of North Canterbury Federated Farmers, Mr B. H. Palmer. It was quite obvious that killing charges in Canterbury had been too high. A company in Southland had paid an initial rebate of 10c a lamb and a further rebate of 15c a lamb, so that where he had 2000 lambs a producer in Southland would reap an extra $5OO more than his counterpart in Canterbury. This company had already announced that it also intended to hold killing charges at last season’s levels. It must be the aim of Canterbury processors to achieve results in line with this.

North Canterbury Federated Farmers had been very critical that improvement in marketing had been unacceptable to New Zealandowned companies in Canterbury and if it could be achieved by the expertise of a British-owned company then this must also be to the advantage of producers, Mr Palmer said.