Beef + Lamb abandons two-year push for joint market development body with meat companies

Wednesday 17th June 2015

Beef + Lamb New Zealand says it won't proceed with a joint market development body because meat companies and exporters baulked at paying half of the $8 million cost.

The decision by meat processors to continue funding their own marketing rather than putting up some $4 million for a joint effort with Beef + Lamb means the farmer owned industry organisation won't proceed with the plan.

Beef + Lamb currently spends about $8 million on its own to fund the country of origin marketing programme. It had proposed that processors pick up half the cost to reduce the funding required from farmers under their Commodity Levy. It has spent two years of one-on-one meetings and workshops with meat companies trying to get the proposal over the line.

"Naturally, after all the hard work, it’s disappointing that we weren’t able to get agreement," said Beef + Lamb chairman James Parsons. “The Beef + Lamb board and senior management team is now taking a deep breath and considering next steps before we shape up our final proposition to put to farmers for the 2016-2022 commodity levy cycle."

The meat industry has struggled to agree on stripping out surplus capacity as companies chase livestock to keep their chains busy. While some, like Silver Fern Farms have pushed a value-add branded product onto supermarket shelves in export markets, others are content to service the commodity end of the market.

"Processors already invest more than $8 million in their own brand promotions and this will increase as new markets are developed," said Bill Falconer, chairman of the Meat Industry Association. "Considerable time was spent usefully exploring the possible content and cost of a country of origin programme. However, a solution could not be identified justifying processors assuming 50 percent of the cost over and above the marketing investments they are committed to making and growing."

Meat and edible offal exports were worth $6.2 billion in the 12 months ended April 30, accounting for almost 13 percent of total merchandise exports and ranking second only to dairy products.

BusinessDesk.co.nz

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