October 20, 2025 • 6 mins
The chairman of the Alliance Group on the YES vote to the Dawn Meats deal. It was an overwhelming mandate - 88% of the shares on issue voted and, of those, 87% backed the deal. Ultimately, it was a vindication of the board’s decision to partner with Dawn. But was it Hobson’s choice? And what will the deal do to solve the overcapacity issue in the red meat industry?
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Let's kick off today's show with today's big story, the
first of two strategic Farmer Cooperative votes this month Fonterra
later in the month, of course, Today or yesterday was
the Alliance Group votes over the Dawn meat steal, an
overwhelming mandate. Mark Wwinn, Chair of the Alliance Group, is
(00:21):
this vindication of you and the board?
Speaker 2 (00:24):
Well, we're delighted, Jamie. The shareholders have voted and voted
very clearly in favor. So yes, it's a vindication of
the proposer from Dawn and we're really excited about that future.
Speaker 1 (00:36):
Yeah. But for the farmers, Mark, I don't want to
sound cynical, but was it like Hobson's choice.
Speaker 2 (00:41):
Well, it's a tough one. I think once farmers had
decided they didn't want to put capital in themselves, then
you go to external capital and when you start looking
across the world, you couldn't really come up with a
better partner than Dawn. So I think that's what they
saw and that's how they voted.
Speaker 1 (00:59):
Northern Hemisphere, Southern Hemisphere, all around. Supply, I get all that,
but you've kind of sold the family silverware once again.
I'm playing devil's advocate here. One hundred percent farmer owned cooperative.
And we're going to hear from Shane Jones shortly and
I think I know what he'll say, has now gone
into foreign ownership or foreign control?
Speaker 2 (01:21):
Yeah, look at it has. At the end of the day,
we have had far too much debt and it had
to be paid back. And if again our current shareholders
went able or went willing to put the capital into
pay it back, we had to get capital from elsewhere
or you know, the future looked pretty ugly indeed, So
(01:42):
that's the reality. Look, the equity position is sixty five
percent Dawn thirty five percent Alliance co op. But there's
a whole lot of key decisions, twenty of them where
we will behave as a fifty to fifty joint venture
and that's all locked and loaded into the agreement.
Speaker 1 (01:57):
So the vote has done in dusted. What is the
time frame from here on in?
Speaker 2 (02:03):
Yes, so from today now we go through the or
the legal and documentation type work, go through the High
Court process for the scheme of arrangement, and we expect
to have all of that complete, with the money in
the bank and the joint venture up and running pretty
much by the end of the first week of December.
Speaker 1 (02:23):
You had quite a high thresholder bar to jump over
to get this deal past the goalie. If you want,
eighty eight percent of the shares on issue voted. That's
remarkably high, and of those that voted, eighty seven percent
back the deal. Now, I'm thinking of the big players
who wanted to recapitalize this between them themselves, they would
(02:44):
almost hold the other thirteen percent of the votes, wouldn't they.
Speaker 2 (02:48):
Well, they'd be a reasonable chunk of that's thirteen But
I again, I think it just comes down to the
vast majority of the shareholders didn't want to put the
capital in and therefore vote appropriately given that Dawn is
a good global player, and probably they're thinking that, you know,
thirty five percent of a high performing company is a
(03:11):
really good alternative.
Speaker 1 (03:12):
Well, with the wisdom of hindsight, was the Alliance Group
Mark one a totally impure cooperative? Your biggest shareholder is
a stock firm, stock and station agent. Your second biggest
shareholder is PAMU.
Speaker 2 (03:26):
Yeah, look, it's a very difficult question to answer. I
think in terms of the marketplace with the over capacity,
you know that the stock companies still play quite a
significant role for pretty much every player in the industry,
and so that won't go away until the capacity is rationalized.
So that makes it very tough. I think the lesson
(03:48):
learned for Alliance going all the way through is that
when you have a strong balance sheet, and arguably we
should have done a capital raise in the very good times,
when you have a strong balance sheet, have much more
a field of options in front of you that will
decrease or diminish your dependency on some of those so
called fedues.
Speaker 1 (04:09):
Well, now that you're no longer effectively a cooperative, what's
going to happen to these big third party traders.
Speaker 2 (04:16):
Well, I think they'll still have a role. We've got
to work all that through with Dawn, and in fact
Nile Brown is in the country for a few days
and is meeting with some of the larger farmers. So
the post discussions, no doubt will become front and center
over the next week or so. But I think once
the JV is established, we just have to sit down
(04:39):
and work out the best strategy to procure livestock that
creates the best value for both the shareholders.
Speaker 1 (04:45):
Hey, just let me go back to the final question
that the over capacity issue this deal is going to
do nothing for that or does Dawn Meets have a
rationalization program in mind for the Alliance group and some
of your plants.
Speaker 2 (04:58):
No, no rationalization all for us. Dawn have done deep
due diligence on Alliance and given that we made the
hard decision to close Smithfield Plant and tomorrow last year,
they and the current Alliance board and management are very
comfortable with our capacity versus our regional stock flows. But
the overall industry still has far too much capacity and
(05:22):
that will have to be addressed going for.
Speaker 1 (05:23):
Is it going to be a matter of who blinks first?
Speaker 2 (05:27):
I don't know. That's certainly the traditional way it's happened,
and I think that's a very value destructive outcome for
both players and farmers. So I'd like to think that
there might be smarter ways around collaboration that could be
worked through going forward.
Speaker 1 (05:42):
Hey, Mark, facetiously, a farmer did say to me this morning,
just in humor, that now when you're doing the Friday
afternoon calls to set the sheds, you can have to
make a toll call to Ireland.
Speaker 2 (05:55):
Yeah, well we might have to do that. We'll see
how we go.
Speaker 1 (05:58):
Mark one, thanks for your time. Congratulations to you and
your board. You've had an overwhelming mandate and I guess
it's a vindication of your plan to get Alliance out
of the mire. Well done.
Speaker 2 (06:10):
Thank you, Jamie appreciate that
Let's kick off today's show with today's big story, the
first of two strategic Farmer Cooperative votes this month Fonterra
later in the month, of course, Today or yesterday was
the Alliance Group votes over the Dawn meat steal, an
overwhelming mandate. Mark Wwinn, Chair of the Alliance Group, is
(00:21):
this vindication of you and the board?
Speaker 2 (00:24):
Well, we're delighted, Jamie. The shareholders have voted and voted
very clearly in favor. So yes, it's a vindication of
the proposer from Dawn and we're really excited about that future.
Speaker 1 (00:36):
Yeah. But for the farmers, Mark, I don't want to
sound cynical, but was it like Hobson's choice.
Speaker 2 (00:41):
Well, it's a tough one. I think once farmers had
decided they didn't want to put capital in themselves, then
you go to external capital and when you start looking
across the world, you couldn't really come up with a
better partner than Dawn. So I think that's what they
saw and that's how they voted.
Speaker 1 (00:59):
Northern Hemisphere, Southern Hemisphere, all around. Supply, I get all that,
but you've kind of sold the family silverware once again.
I'm playing devil's advocate here. One hundred percent farmer owned cooperative.
And we're going to hear from Shane Jones shortly and
I think I know what he'll say, has now gone
into foreign ownership or foreign control?
Speaker 2 (01:21):
Yeah, look at it has. At the end of the day,
we have had far too much debt and it had
to be paid back. And if again our current shareholders
went able or went willing to put the capital into
pay it back, we had to get capital from elsewhere
or you know, the future looked pretty ugly indeed, So
(01:42):
that's the reality. Look, the equity position is sixty five
percent Dawn thirty five percent Alliance co op. But there's
a whole lot of key decisions, twenty of them where
we will behave as a fifty to fifty joint venture
and that's all locked and loaded into the agreement.
Speaker 1 (01:57):
So the vote has done in dusted. What is the
time frame from here on in?
Speaker 2 (02:03):
Yes, so from today now we go through the or
the legal and documentation type work, go through the High
Court process for the scheme of arrangement, and we expect
to have all of that complete, with the money in
the bank and the joint venture up and running pretty
much by the end of the first week of December.
Speaker 1 (02:23):
You had quite a high thresholder bar to jump over
to get this deal past the goalie. If you want,
eighty eight percent of the shares on issue voted. That's
remarkably high, and of those that voted, eighty seven percent
back the deal. Now, I'm thinking of the big players
who wanted to recapitalize this between them themselves, they would
(02:44):
almost hold the other thirteen percent of the votes, wouldn't they.
Speaker 2 (02:48):
Well, they'd be a reasonable chunk of that's thirteen But
I again, I think it just comes down to the
vast majority of the shareholders didn't want to put the
capital in and therefore vote appropriately given that Dawn is
a good global player, and probably they're thinking that, you know,
thirty five percent of a high performing company is a
(03:11):
really good alternative.
Speaker 1 (03:12):
Well, with the wisdom of hindsight, was the Alliance Group
Mark one a totally impure cooperative? Your biggest shareholder is
a stock firm, stock and station agent. Your second biggest
shareholder is PAMU.
Speaker 2 (03:26):
Yeah, look, it's a very difficult question to answer. I
think in terms of the marketplace with the over capacity,
you know that the stock companies still play quite a
significant role for pretty much every player in the industry,
and so that won't go away until the capacity is rationalized.
So that makes it very tough. I think the lesson
(03:48):
learned for Alliance going all the way through is that
when you have a strong balance sheet, and arguably we
should have done a capital raise in the very good times,
when you have a strong balance sheet, have much more
a field of options in front of you that will
decrease or diminish your dependency on some of those so
called fedues.
Speaker 1 (04:09):
Well, now that you're no longer effectively a cooperative, what's
going to happen to these big third party traders.
Speaker 2 (04:16):
Well, I think they'll still have a role. We've got
to work all that through with Dawn, and in fact
Nile Brown is in the country for a few days
and is meeting with some of the larger farmers. So
the post discussions, no doubt will become front and center
over the next week or so. But I think once
the JV is established, we just have to sit down
(04:39):
and work out the best strategy to procure livestock that
creates the best value for both the shareholders.
Speaker 1 (04:45):
Hey, just let me go back to the final question
that the over capacity issue this deal is going to
do nothing for that or does Dawn Meets have a
rationalization program in mind for the Alliance group and some
of your plants.
Speaker 2 (04:58):
No, no rationalization all for us. Dawn have done deep
due diligence on Alliance and given that we made the
hard decision to close Smithfield Plant and tomorrow last year,
they and the current Alliance board and management are very
comfortable with our capacity versus our regional stock flows. But
the overall industry still has far too much capacity and
(05:22):
that will have to be addressed going for.
Speaker 1 (05:23):
Is it going to be a matter of who blinks first?
Speaker 2 (05:27):
I don't know. That's certainly the traditional way it's happened,
and I think that's a very value destructive outcome for
both players and farmers. So I'd like to think that
there might be smarter ways around collaboration that could be
worked through going forward.
Speaker 1 (05:42):
Hey, Mark, facetiously, a farmer did say to me this morning,
just in humor, that now when you're doing the Friday
afternoon calls to set the sheds, you can have to
make a toll call to Ireland.
Speaker 2 (05:55):
Yeah, well we might have to do that. We'll see
how we go.
Speaker 1 (05:58):
Mark one, thanks for your time. Congratulations to you and
your board. You've had an overwhelming mandate and I guess
it's a vindication of your plan to get Alliance out
of the mire. Well done.
Speaker 2 (06:10):
Thank you, Jamie appreciate that
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