October 20, 2025 • 8 mins
Jeff Grant says the Alliance deal with Dawn Meats still leaves questions around leadership with the co-operative.
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Speaker 1 (00:11):
Jeff Grant catches up with us once again this afternoon.
The news came out this morning that Alliance Farmers shareholders
have voted overwhelmingly in favor of a strategic investment partnership
with Irish based Dawn. Meet's just been pretty vocal around
the situation regarding this collaboration. Joins us today to give
a bit of an overview of what happens next. Jeff,
(00:33):
good afternoon, once again. What's your initial reaction, Ohio.
Speaker 2 (00:38):
I think Peasley congratulations to the Alliance crept board and
management for the success of the vote. You know, I
think all of us, either side of the argument, would
like to see that boat was either one way or
the other reasonably strongly and so on that basis, I
think at eight got a clear mandate follow through on
(01:00):
the dorm Meets deal.
Speaker 1 (01:02):
You've heard rumors at Nile Brown, the chief executive Door Meets,
has been and down on the South over the past
couple of days, So he wouldn't have turned up here
if there wasn't a deal on the table. I suppose
that should have given it away.
Speaker 2 (01:14):
Well. The other aspect would have been I would have
thought that if there been and no Door Meats would
have had a view about what they might still want
to do, and that would have been either a conversation
with the banks or possibly with the NO group in
terms of their funding model. So on that basis, you know,
i'd expect if you're doing a material furtures of a
(01:36):
company especially, I'm sure you want to be there to
find out the result.
Speaker 1 (01:40):
Are you surprised at the ease of which Alliance shareholders
put this proposal through?
Speaker 2 (01:45):
Look, I think that the whole debate was really driven
by two aspects. One was that there was probably a
high level of apathy in the early stages that probably
changed a bit with us arguing the NO case. So
on the number of people who actually voted in terms
(02:06):
of ninety million years, that was a substantial vote, and
so that really tells you that people got engaged during
that process. I think the second part was just this
ever ending threat of the bank stepping in on the
nineteenth of December, because it just created a cloud of saying, well,
(02:27):
what are the options if has happened. My view has
always been that the banks wouldn't have stepped in on
the nineteenth going to close a plant down six days
before Christmas in the start of the peak season, so
there would have been a mechanism to work through the
season for the seasonal finance. We would have felt comfortable
(02:48):
about being able to meet a bulk of a dent
in some of the equity by the nineteenth So on
that basis, you know Finis is going to have to
accept that they have lost from seventy to inequity down
to forty percent under the current regime. You know, this
board needs to really reflect why did the company get
itself into this position in the first place. And that's
(03:11):
probably the biggest frustration as we watched the last come
up in New Zealand meat industry disappear. The reality is
this was reflected directly on the way that board and
the management have operated over the last probably five years.
Speaker 1 (03:26):
Do you have a concern this can be seen as
nothing more than a short term sugar fix.
Speaker 2 (03:32):
Look, if you were looking around the world and saying
where would be a compatible person or company to be
involved in the New Zealand meat industry and fairness, door
Meats would be in that top five. So in terms
of company being in the Northern hemisphere higher and be
lower and land as a mix with a line screep
(03:56):
but I just you know, the frustration I've got need
to happen.
Speaker 1 (04:01):
Do you think the Alliance Sport has been pretty transparent
through this process because a lot of people have been
cynical about it.
Speaker 2 (04:07):
No, no, they haven't at all. And I don't think
that in terms of the exploring the options. I think
the board found itself somewhat stuck by the fact it
was under some pressure with the banks. I mean, this
is like a farmer, you know, just ignoring his bank
for a long time, and then suddenly the bank says
to you, look, make if you can't sort out finances,
(04:29):
we're going to shut you up. To allow a co
op or a company to get to that position. It
just makes you really wonder.
Speaker 1 (04:39):
So is it a case of the questioning starts now
regarding the Alliance Sport.
Speaker 2 (04:42):
Perhaps, Look, I think it will be a study of
university business management courses for some years to come. This
would be one of the saddest outcomes of a New
Zealand owned enterprise ending up in the hands of somebody else,
and when it probably had the opportunity of not having
(05:04):
to go down that track.
Speaker 1 (05:06):
You talked about over capacity before. It's still something that
needs address in the red meat.
Speaker 2 (05:10):
Sector, all of this question is more venus. This question
has been in front of the industry for about twenty
five years, so it's increasingly becoming a problem. I think
over capacity will continue for another few years. The question
would be is there going to be some consolidation or
is there just going to be companies closing that you
(05:34):
get to play out. I can't product what we're going
to see, but I would say, especially the numbers, the
way that the climbing, especially in cheat meat, I think
you're going to see a bit of uptick with beef
over the next three to five years, but on cheat meat,
I don't see a plateau coming forward some time.
Speaker 1 (05:54):
The Northern South and Farmer's counterproposal to Alliance, do you
think it was a case of too little, too late.
Speaker 2 (06:00):
Yeah, Look, there were two difficulties in that. One is
that I think if Ball Meats and the Alliance Group
proposal have been fifty to fifty with an injection of
capital over three years of say twenty five million from shareholders,
I don't think we would have had a debate. It
was just the fact that it was sixty five percent.
(06:22):
Could there have been an argument that some eighteen months
ago that the recapitalization, well, the reality was it was
in the hands of the board to find a suitable partner.
And I don't think anybody felt that the original capital
raise with the shareholders has done anything other than poorly timed,
(06:45):
poorly organized, and done with some arrogance in terms of
just lopping off you without really a good explanation as
to the need and desire for the strategy of the
company going forward. So for that reason, I'd fully understand
why shaeholders initially didn't money in at the worst time.
We have sold a company at the worst time it's
history in terms of debt that has completely turned around
(07:09):
in the last twelve months and its projections going forward
to much more stronger than they did twelve months ago.
Speaker 1 (07:16):
So you believe there would have been another option on
the table if this had been a no voter, but
not a bailout. But the banks would have been forgiving
to a degree.
Speaker 2 (07:24):
No, no, the banks wouldn't have been forgiving. And the
wye Ey group had effectively had two leaders of intent,
one involved at some equity, the other involved the rationalization
in terms of debt, and then the ability for farmers
to capitalize the company over a period of time. I
would have to say through the the great work of
(07:47):
Mark Gunton, who's got obviously good stretch out into the
international market through his own business. Clearly those two letters
of intent which were given to the chairman of Alliance
Group Class Friday, were ones that genuinely would have given
us a solution.
Speaker 1 (08:03):
I suppose the issue of third party though, is just
going to hang around and of nothing else, just gain
more momentum as red meat becomes a premium product and
supplies at a minimum too.
Speaker 2 (08:13):
Yeah, look, I think the short term future of the
re meat industry is pretty good. You know, would possibly
have to think mister Trump to a certain extent on
the beach side with tariffs exceeded of just distorting the market.
And on that basis, I think we'll see some strong
pricing over the next twelve to twenty four months. But no,
(08:35):
like all ways in the meat industry, when you're up,
you go down.
Speaker 1 (08:38):
Jeff Grant always appreciate your time on the muster. Jeers
Jeff Grant giving his views around the Alliance Steel that's
gone through. We'll continue with this theme next. Matt McCrae
of my Cada we'll have a catch up next and
get Met's reaction. This is the muster
Jeff Grant catches up with us once again this afternoon.
The news came out this morning that Alliance Farmers shareholders
have voted overwhelmingly in favor of a strategic investment partnership
with Irish based Dawn. Meet's just been pretty vocal around
the situation regarding this collaboration. Joins us today to give
a bit of an overview of what happens next. Jeff,
(00:33):
good afternoon, once again. What's your initial reaction, Ohio.
Speaker 2 (00:38):
I think Peasley congratulations to the Alliance crept board and
management for the success of the vote. You know, I
think all of us, either side of the argument, would
like to see that boat was either one way or
the other reasonably strongly and so on that basis, I
think at eight got a clear mandate follow through on
(01:00):
the dorm Meets deal.
Speaker 1 (01:02):
You've heard rumors at Nile Brown, the chief executive Door Meets,
has been and down on the South over the past
couple of days, So he wouldn't have turned up here
if there wasn't a deal on the table. I suppose
that should have given it away.
Speaker 2 (01:14):
Well. The other aspect would have been I would have
thought that if there been and no Door Meats would
have had a view about what they might still want
to do, and that would have been either a conversation
with the banks or possibly with the NO group in
terms of their funding model. So on that basis, you know,
i'd expect if you're doing a material furtures of a
(01:36):
company especially, I'm sure you want to be there to
find out the result.
Speaker 1 (01:40):
Are you surprised at the ease of which Alliance shareholders
put this proposal through?
Speaker 2 (01:45):
Look, I think that the whole debate was really driven
by two aspects. One was that there was probably a
high level of apathy in the early stages that probably
changed a bit with us arguing the NO case. So
on the number of people who actually voted in terms
(02:06):
of ninety million years, that was a substantial vote, and
so that really tells you that people got engaged during
that process. I think the second part was just this
ever ending threat of the bank stepping in on the
nineteenth of December, because it just created a cloud of saying, well,
(02:27):
what are the options if has happened. My view has
always been that the banks wouldn't have stepped in on
the nineteenth going to close a plant down six days
before Christmas in the start of the peak season, so
there would have been a mechanism to work through the
season for the seasonal finance. We would have felt comfortable
(02:48):
about being able to meet a bulk of a dent
in some of the equity by the nineteenth So on
that basis, you know Finis is going to have to
accept that they have lost from seventy to inequity down
to forty percent under the current regime. You know, this
board needs to really reflect why did the company get
itself into this position in the first place. And that's
(03:11):
probably the biggest frustration as we watched the last come
up in New Zealand meat industry disappear. The reality is
this was reflected directly on the way that board and
the management have operated over the last probably five years.
Speaker 1 (03:26):
Do you have a concern this can be seen as
nothing more than a short term sugar fix.
Speaker 2 (03:32):
Look, if you were looking around the world and saying
where would be a compatible person or company to be
involved in the New Zealand meat industry and fairness, door
Meats would be in that top five. So in terms
of company being in the Northern hemisphere higher and be
lower and land as a mix with a line screep
(03:56):
but I just you know, the frustration I've got need
to happen.
Speaker 1 (04:01):
Do you think the Alliance Sport has been pretty transparent
through this process because a lot of people have been
cynical about it.
Speaker 2 (04:07):
No, no, they haven't at all. And I don't think
that in terms of the exploring the options. I think
the board found itself somewhat stuck by the fact it
was under some pressure with the banks. I mean, this
is like a farmer, you know, just ignoring his bank
for a long time, and then suddenly the bank says
to you, look, make if you can't sort out finances,
(04:29):
we're going to shut you up. To allow a co
op or a company to get to that position. It
just makes you really wonder.
Speaker 1 (04:39):
So is it a case of the questioning starts now
regarding the Alliance Sport.
Speaker 2 (04:42):
Perhaps, Look, I think it will be a study of
university business management courses for some years to come. This
would be one of the saddest outcomes of a New
Zealand owned enterprise ending up in the hands of somebody else,
and when it probably had the opportunity of not having
(05:04):
to go down that track.
Speaker 1 (05:06):
You talked about over capacity before. It's still something that
needs address in the red meat.
Speaker 2 (05:10):
Sector, all of this question is more venus. This question
has been in front of the industry for about twenty
five years, so it's increasingly becoming a problem. I think
over capacity will continue for another few years. The question
would be is there going to be some consolidation or
is there just going to be companies closing that you
(05:34):
get to play out. I can't product what we're going
to see, but I would say, especially the numbers, the
way that the climbing, especially in cheat meat, I think
you're going to see a bit of uptick with beef
over the next three to five years, but on cheat meat,
I don't see a plateau coming forward some time.
Speaker 1 (05:54):
The Northern South and Farmer's counterproposal to Alliance, do you
think it was a case of too little, too late.
Speaker 2 (06:00):
Yeah, Look, there were two difficulties in that. One is
that I think if Ball Meats and the Alliance Group
proposal have been fifty to fifty with an injection of
capital over three years of say twenty five million from shareholders,
I don't think we would have had a debate. It
was just the fact that it was sixty five percent.
(06:22):
Could there have been an argument that some eighteen months
ago that the recapitalization, well, the reality was it was
in the hands of the board to find a suitable partner.
And I don't think anybody felt that the original capital
raise with the shareholders has done anything other than poorly timed,
(06:45):
poorly organized, and done with some arrogance in terms of
just lopping off you without really a good explanation as
to the need and desire for the strategy of the
company going forward. So for that reason, I'd fully understand
why shaeholders initially didn't money in at the worst time.
We have sold a company at the worst time it's
history in terms of debt that has completely turned around
(07:09):
in the last twelve months and its projections going forward
to much more stronger than they did twelve months ago.
Speaker 1 (07:16):
So you believe there would have been another option on
the table if this had been a no voter, but
not a bailout. But the banks would have been forgiving
to a degree.
Speaker 2 (07:24):
No, no, the banks wouldn't have been forgiving. And the
wye Ey group had effectively had two leaders of intent,
one involved at some equity, the other involved the rationalization
in terms of debt, and then the ability for farmers
to capitalize the company over a period of time. I
would have to say through the the great work of
(07:47):
Mark Gunton, who's got obviously good stretch out into the
international market through his own business. Clearly those two letters
of intent which were given to the chairman of Alliance
Group Class Friday, were ones that genuinely would have given
us a solution.
Speaker 1 (08:03):
I suppose the issue of third party though, is just
going to hang around and of nothing else, just gain
more momentum as red meat becomes a premium product and
supplies at a minimum too.
Speaker 2 (08:13):
Yeah, look, I think the short term future of the
re meat industry is pretty good. You know, would possibly
have to think mister Trump to a certain extent on
the beach side with tariffs exceeded of just distorting the market.
And on that basis, I think we'll see some strong
pricing over the next twelve to twenty four months. But no,
(08:35):
like all ways in the meat industry, when you're up,
you go down.
Speaker 1 (08:38):
Jeff Grant always appreciate your time on the muster. Jeers
Jeff Grant giving his views around the Alliance Steel that's
gone through. We'll continue with this theme next. Matt McCrae
of my Cada we'll have a catch up next and
get Met's reaction. This is the muster
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