New hygiene requirements "might not be worth cost’

Press, Volume CXIII, Issue 33128, 19 January 1973, Page 7

New hygiene requirements "might not be worth cost’

(New Zealand Press Association)

WELLINGTON, January 18

The chairman of the Swift New Zealand Company, Ltd (Sir Clifford Plimmer), expects fresh demands from Europe for new hygienic conditions in meat works and suggests that it might not he worth while to meet them.

In the last few years meat

export companies have been put to expense to meet the requirements of the North American market in the ■treatment of meat in the I works.

In the annual report Sir Clifford Plimmer refers to the “ever changing inspection requirements of various countries” and the constant concern it causes the industry.

He says that during the last three years Swift has endeavoured to comply with every regulation as it has come forward, the cost not yielding one cent of additional profitability.

More expenditure “Each year sees greater demands on the facilities at present available, mainly at all the older New Zealand plants, and it seems that it may not be long before additional expense will be incurred in up-dating our freezing stores at one plant and at the other, the air (conditioning of our killing, boning and cooling departments.” he says.

“Although the industry has incurred many millions of dollars expenditure in complying with the requirements of the American market, it may have to face much more 'to "meet what seems to be the even higher hygiene

standards of the European [Economic Community coun-i tries. ■ “If this is so, the viability |of those markets may be in | doubt.” | The main factors conI tributing to the company’s i profit of $504,208 in the year to October I—compared with a loss of $295,032 in 1971—were a more realistic level of processing rates, reduced loss of time from stoppages, better sheep and lamb trading results (although beef trading was less profitable), and sizeable income tax benefits resulting from investment (allowances and special depreciation consequent on the (heavy capital programme. 'The loss carry-forward also • helped. Adverse factors were the (weakening of sterling after the floating of the pound, the United Kingdom lamb levies, increased freight rates, and the removal of the United States import quota, which affected beef realisations.

Sir Clifford Plimmer says that when farm leaders, including members of the New Zealand Meat Board, have talked of rationalising facilities to check rising costs, it 'is astonishing that another licence has been granted for a cattle slaughtering plant and beef boning establishment in Hawke’s Bay. The profit has been struck after providing $564,689 C 5397,141 in 1971) for depre-

ciation and $166,000 for income tax equalisation. Previous published accounts have not shown the amount of income tax and a note to the latest accounts indicates that none will be payable on the 1972 profit. The tax equalisation provision will be used in later years when the excess depreciation now claimed for income tax purposes is charged in the accounts. The unchanged 10 per cent dividend will require $300,000.

Shareholders’ funds were $204,308 higher at $7,163,607, including unchanged capital of s3m. Fixed assets were $2,106,116 higher at $9,226,106.