Farmers still keen to acquire works

Press, 18 June 1979, Page 1

Farmers still keen to acquire works

North Canterbury sheepfarmers are still keen to buy a freezing works in Canterbury. This is in spite of the Government’s recent refusal to allow the Meat Board to re-open negotiations on their behalf for the purchase of the Kaiapoi works of N.C.F. Kaiapoi, Ltd, using meat industry reserve account funds. The executive of the meat and wool section of North Canterbury Federated Farmers has decided to ask the c o m - mittee of farmers, which has been working with the board on acquiring killing facilities in Canterbury, to urge the board to “pursue with the utmost vigour” the acquisition of a works in the province. Mr J. H. M. Dawson

(Waimairi branch), who proposed this course of action said that the board had to be asked to accept that it was possible to buy a works in Canterbury. If it was not able to buy Kaiapoi, he suggested it might be interested in another works, possibly Islington. Approval of the merger of Waitaki Industries, Ltd, and New Zealand Refrigerating Company, Ltd, in Waitaki N.Z. Refrigerating, Ltd, had been subject to a certain understanding, he said — generally believed to be that a works would be made available to producers — and that it should be followed up. The merger had not left farmers in Canterbury in a better position, he said. Some speakers complained that farmers had

not received as much information about the economics of the proposed purchase of Kaiapoi as they should, and were confused after the recent remarks of the Prime Minister (Mr Muldoon) and the Associate Minister of Finance (Mr Quigley). Mr R. W. Davison (Culverden) said that any business organisation that decided to spend S4M (the board’s original offer for N.C.F. Kaiapoi, Ltd) would want to have the relevant information “on a piece of paper.” Mr Dawson said he could not see why Mr Quigley should have the figures and they, who were the potential purchasers, did not. Mr M. R. Barnett, now a member of the Meat Board and formerly chair-

man of the committee set up by the board, said that the committee had received the report of the Gentry committee. The only information not made available had been figures for individual companies. Then more than two years ago the farmers of Canterbury had decided to guarantee their support to the board for the purchase of the works on their behalf. Mr R. H. M. Johnson (Oxford) said that with the changing membership of Federated Farmers, there might be new members who were not conversant with the matter. He suggested that the committee might bring together the history of the negotiations in a circular. Referring to the price originally offered for the

shares in N.C.F. Kaiapoi, Ltd, Mr Barnett said that the board’s attitude was: Where was it possible to buy a works with two and a half chains for S4M. The industry could not do without Kaiapoi, he said, and no matter who ran it, improvements would have to be made and the users in the final analysis would have to pay. In a letter to the provincial secretary (Mr I. R. French-Wright), the chairman of the Meat Board (Mr Charles Hilgendorf), said that late last year the board had agreed that the offer for Kaiapoi should be based on the original price, $7 a share, less the losses incurred by the company in the last two years. However, he said, it was clear that a deal could not

be made at a sum greatly below $7. Each of the principal share-holders had offered to buy out the other about that price. A feeling emerging from the discussion was that if farmers were to ensure more competition in the industry in Canterbury, the acquisition of a works would be the quickest way. If they decided to build a new works, they would have to persuade the Meat Authority of the need for more killing capacity in the area. Their claims for the use of meat industry reserve account funds, which would again require Government approval, might come after Otago, where there were also moves afoot for the establishment of a farmer-controlled works.

However, the meeting did approve without dissent, an Amuri branch remit asking the Meat Board to proceed immediately W'ith a feasibility study for a new freezing works and meat-cutting plant in North Canterbury, owned by a producer co-operative. Mr Davison said that this study could then be compared by farmers with the Meat Board’s investigations into the buying of Kaiapoi and a realistic decision reached. The meeting also decided to refer to its meat and wool committees a proposal from its Oxford branch that the federation should look into the export of breeding stock to determine whether it was in the best interests of fanners.