Waitaki looks at take-over bid for Borthwicks

Press, 9 August 1980, Page 1

Waitaki looks at take-over bid for Borthwicks

By

DOUG FYFE

Rumours that Waitaki N.Z. Refrigerating, Ltd, may be contemplating taking over all or part of Borthwicks seem to have some substance.

Borthwicks is reputed to be probably the secondlargest international meat trader in the world. The Meat Board is keeping a closer watch. Its chairman (Mr A. M. Begg) said yesterday: “As a board we have been considering the implications of a possible take-ove.r and what the board’s attitude to such a move would be.” But he would go no further; Mr A. F. Wright, Dominion president of Federated Farmers, said: “I am well aware of the rumours, but I feel it would be premature to speculate at this stage because, if they are true, any comment on my part could prejudice future involvement by the federation.’’

The Minister of Agriculture (Mr Maclntyre) could not be reached yesterday: he is in Australia. However, it was learned yesterday that no Waitaki offer has been.made yet.

Federated Farmers meat and wool leaders in Canterbury do not , like the idea of a Waitaki move on Borthwicks. They feel it could give Waitaki control of too much meat and further reduce competition in the' industry, the level of which they are already unhappy about. . . . It was something that all thinking farmers would be' very concerned about, said the chairman of the meat and wool section of North Canterbury Federated Fanners (Mr E. W. Turrell). r If Waitaki took’ over control not only of - lambs •that Borthwicks now marketed from -. the Canterbury Frozen Meat Company but

lambs that Borthwicks obtained through southern works, it might end up handling a higher proportion of South Island lambs than farmers would wish to see.

Farmers must be concerned about the resulting further reduction in competition. “We would not be happy at all about this,” said the chairman of the Mid-Canterbury meat and wool section (Mr J. C. Ingold). “This would result in a monopoly in the South Island. It was bad enough when Waitaki took over the New Zealand Refrigerating Company. “This would be disastrous for the whole industry. We have got so little competition in the South Island now. We would be very much opposed to it.” The chairman of - the meat and wool section in South Canterbury (Mr H. B. Anderson) said that already farmers were fairly critical of the lack of competition in certain parts of the South Island. If a take-over eventuated, competition would be lessened still further. He believed his view would be the general feeling of farmers. While a take-over by Waitaki of Borthwicks could mean Waitaki’s controlling or having- an interest in 12 out of 17 works in the South Island, it is believed that it would not necessarily market an overwhelming proportion of the South Island. kill —probably well ■ under half.

Even at its own works Waitaki kills for other interests such as the Primary Producers’ Co-operative Society, aS in the same

way Borthwicks handles only a' part of the C.F.M. kill.

However, in Canterbury it would be rather different, with Waitaki commanding a sizeable proportion of the kill. In Canterbury it would own or have an/, interest in all seven works, except the Kaiapoi works of N.C.F. Kaiapoi, Ltd. -This is a relatively small works at this stage, and in the process of being converted into a producer co-oper-ative.

While a greatly enlarged Waitaki with control of or an interest in a total of 18 works in. the country would be an organisation with considerable strength, and would have the advantage of presumably being New Zealand-based, Borthwicks has provided an important competitive element in the New Zealand market for almost as long as the country’s frozen meat trade has been in existence.

Borthwicks was handling New Zealand meat, more than 90 years ago and its earliest office was in Ashburton. It took up its first freezing works in New Zealand at Waitara in Taranaki in 1902.

It has an impressive array of outlets in the northern hemisphere and has lately managed New Zealand’s expanding lamb .trade in Iran.. Borthwicks . markets about 18 per cent of New Zealand’s total meat; production including about 20 per cent of all lambs and sheep killed for export in the -South Island. As well as marketing a proportion of the lambs killed by C.F.M.. works, Borthwicks kills at Alliance’s Lorneville works, the Southland Frozen Meat Company's Makarewa and Mataura works, Waitaki’s ? Balclutha works and Hawke’s Bay Farmers’ Whakatu' works. Through , BorthwickC.W.S., a subisidiafy of both Borthwicks andC.W.S., it is involved in the running of four works in the North Island. • ” In one commercial venture it is already associated with Waitaki. That is ? in Hawke’s Bay. Hide ? Processors, of Napier, in which' it has a. third shareholding along • with Waitaki and Hawke’s Bay Farmers’ Meat. Company, Ltd.

It is thought that any such move as that ru•moured would have to go to the Commerce Commission for consideration.