Board-exporter partnership for lamb marketing

Press, 29 May 1981, Page 18

Board-exporter partnership for lamb marketing

A Canterbury Meat Board member,. Mr M. R. Barnett, believes that a partnership between the board and the Meat Exporters’ Council, which is already developing, will play a vital role in the • further development of New Zealand’s export lamb trade in the years to come. Speaking at a session on lamb marketing at the Lincoln College farmers’ conference last week, he said there could be no argument that compared with 10 years ago, five years ago or even just one year ago the industry was confronted with new forces demanding different responses in New Zealand’s approach to marketing. “There can be no hope for a strong industry, no hope even for its economic survival, unless we are prepared and able to be flexible in our marketing ... “My main advocacy is that the pace of change is accelerating so quickly we cannot afford the luxury of response by evolution on a wait-and-see basis, or at the other extreme, a transformation by revolution, which would be disastrous. On that last point, I simply do not go along with some of those people on the sidelines who want us to chuck out the methods developed over nearly a century and suddenly bring in a monolithic single-seller under Meat Board or Government control. “The solution, is somewhere in the middle .. In the face of major forces acting to reshape the industry, Mr Barnett said that at. times the board had been obliged to act quickly and decisively. It had set its own lamb schedule, it had insisted on controlled storage in the United Kingdom, it had become the prime contractor to Iran, it had exercised more discipline on levels of supply through shipping programming, it had established the Meatmark operation in the United Kingdom and it had stabilised producers’ incomes through a related price-smoothing scheme. «■.

In recent years Mr Barnett said what had been seen was the board being pulled by events into a greater involvement in marketing. Events had changed the nature of the board’s involvement and. would' continue 1 to do so.

The board, through a trust, would shortly own half of the Meat Export Development Company’s (DEVCO’s) shareholding. This had already been agreed to by the company’s present shareholders, the freezing companies. The effect of this would be that the board, representing producer interests, had a direct involvement in a fullyfledged lamb marketing organisation. . The board and the Meat

Exporters’ Council were currently considering a joint or unified approach in a numter of areas. This included contingency plans in the event of a major market dislocation, the development of non-traditional markets, •’ product development, the supervision of .the important lamb contracts and possibly the establishment and administration of storage in key regions. It was possible that a new partnership between the board and the Meat . Exporters’ Council would eventuate ... What these moves emphasised was that both organisations recognised) the new problems. Events nad given them a unity of'purpose that could have far .reaching effects on lamb marketing in several parts of the world. New Zealand had had some lucky breaks during the last few years with its lamb marketing. 1 ! Among these were the sharp upward movement •of lamb prices in sympathy with beef prices when Britain joined the E.E.C., the i| sharp improvement in the pound sterling against the New Zealand dollar and the emergence of the Middle East as a major buyer. Rather than rely on further lucky, breaks in the future, Mr Barnett said he thought-that ;they must do more, to create their’ own opportunities. " “I think that can be done through a combination of approaches, but mainly through a partnership of the board and the Meat Exporters’ Council ton look after long-term contracts, the development of non-traditional markets, storage;, product development and so on. “This would not be a single marketing organisation — a' monolith. — but it would be a marketing organisation with authority in specific regions whose collective (volume in future could account for more than 40 per cent of New Zealand’s, total lamb sales.

“This way private enterprise wouli'be given the chance of robust survival in a world where situations of crisis more and more are

leading to (Government intervention andj take-overs ..'. “I beliexwe we have to ensure thatlthere is greater discipline imlamb marketing in the United Kingdom ... New Zealanjl is let down at times by consignment sellers and by companies (not necessarily smfall companies either) whose own cash flow situations occasionally make them weak sellers. The market is so sensitive that even small quantities of lower priced lamb can deflate it.” /

Mr Barrett recalled that the board ■. had and would intervene in the United Kingdom market with its Meatmark operation. There were a number i of approaches available to protect prices in the British market and they could be implemented according to whatever the market circumstances were. But Mr P. H. Johnston, the general manager of W. and R. Fletcher (N.Z.) Ltd, expressed displeasure at such interventiohs in the market. He said lie 1 regarded them as very dangerous and threatened-too often. Nothing could be more destructive of investment; of money, time and organisation,than a constant threat of loss of ownership of product. On the! development of the Japanese,market for lamb — an arei with a very big potential) but one which needed a dedicated development approach — Mr Barnett saidT that it need not be through a DEVCO-type approach, although he did not rule that out. It could be a market exercise limited to those companies with a solid history in Japan and possibly even conjointly with the board and Japanese partners. The Japanese market, he said, was still at the primary stage of development with most people not yet knowing what lamb was. The board had spent a large amount of money there, but the amount of lamb going there varied according to what other markets were paying, quality was less than desirable and there had been too little follow-through by New;Zealand exporters.