Jamie Mackay: The Country host on farmers offering an alternative to Alliance Group's Dawn Meats offer

A group of Southland farmers say there is a way to profitability for Alliance Group without selling off 65 percent of the co-op.

Alliance shareholders are set to vote on whether to accept a deal from Irish company Dawn Meats, which was offering $250 million for a share in the New Zealand co-operative.

The Country's Jamie Mackay weighed in on the offer - and whether Alliance Group is likely to consider this.

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Episode Transcript

Speaker 1 (00:02):
The Rural Report on Hither Duper see Allen Drive. Jamie
Kai's with us host of the Country, Jamie. Good evening,
Good evening, Ryan. So we've got a bit of drama
going on with Alliance. This is the meat processor. Yeah,
in fact, it's the world's biggest sheep meat process. So
you might remember Dawn meets. This Irish meat company has

(00:22):
struck a deal. They're going to take a sixty five
percent steak in the process for two hundred and fifty
million dollars and it looks like it's the best of
some other worse options, to be perfectly honest, because it
is one hundred percent farmer owned cooperative and a lot
of the farmers wanted to keep it that way. But
they've just run out of rope. So they've basically got

(00:44):
to get get a deal done so they can pave
back back two hundred million dollars of its working capital
for facilities, or the banks could shut them down. However,
some well heled and high profile Southland farmers have made
a large last effort to recapitalize the company themselves. Now,
they tried to do that last year. It didn't work,

(01:07):
But these farmers are saying look, farm sheep farmings and
a lot better nick than it was this time a
year ago. And to chuck some numbers at that Ryan,
this time a year ago, the average profit on a
sheep farm was nineteen thousand dollars. Forty percent of the
farms ran at a loss. In the coming season, they're
predicting the average farm profit to be one hundred and

(01:28):
sixty six five hundred. So these five large scale farmers,
they've written to the board, they've written to the bank.
They want to revisit this. But the Alliance Group chair Markwin,
who used to be the chief executive of Balance Aggrenutrients,
a reasonably qualified sort of business operator, and the commercial
world has said, look, he's all but shut down the idea.

(01:51):
He says, they're just giving the farmer shareholders false hope.
So these guys will have to vote. I think it's
October the twenty. They're not going to have much mind,
much time, should I say, to make up their mind
on an alternative proposal. But one is going to be
out there, and they're running up against that deadline, and
it's coming up pretty soon, isn't it. As you say?

(02:12):
To read its absolutely and just interestingly, Mark winn Is
saying that if the vote fails, this is the October
twenty vote. He said Dawn Meets could purchase the Alliance
Group in an insolvency process. He says that's the most
probable outcome. And if that was the case, Ryan, they
may not need to pay two hundred and fifty million dollars.

(02:35):
They could get it at a fire soil price. Does
not sound like a good outcome at all. Do we
need to brush off the cobwebs for Sir Dave Dobbin, Well,
I don't know. I think farmers here in New Zealand
are doing considerably better than their US counterparts. It was
just interesting only story I picked up on Ryan. I
know you're a keen music fan. So last Saturday in
the US they had farm Made Farm Made forty a

(02:59):
bit like life. You might remember in nineteen eighty five
we had Live Aid Wembley Stadium in Philadelphia Stadium, or
not long after that they had farm Aid. Because Bob
Dylan was quoted, some would say incorrectly as at the
time of saying, look, we're worried about the people in Africa,
what about our own farmers? Because in nineteen eighty five

(03:21):
crop prices were crashing, bank foreclosures were wiping out family
farms at alarming rates and pushing farmer suicides to record levels.
So they got together in September of nineteen eighty five.
And it's interesting that Willie Nelson, Neil Young, Bob Dylan,
John Mellencamp, I can't remember whether he was a cougar

(03:42):
or not at the time. Ryan, they were in the
original cast in nineteen eighty five. They came back again
for farm Aid last weekend. Over the forty years, they've
raised something like eighty five million, nine million in the
first year. And you look back to the playlist or
the people who turned up eighty five for farm Maid,
Foreigner Chris Christopherson, Bonnie Rait, Roy Orbison, Billy Joel, Tom Petty,

(04:06):
the Beach Boys, Emmy Lou Harris, Glenn Campbell. To stop me, Ryan,
because they really got in behind this. And with the
exception of one or two years, we've had a farm
Maid concert every year since. All right, and we'll stop
you there. Actually, Jamie Jamie McKay hosted The Country. Good
to have you on the show. For more from Hither
Duplessy Allen Drive listen live to News Talks. It'd be

(04:27):
from four pm weekdays, or follow the podcast on iHeartRadio