Tuesday, May 21, 2024

Two dozen laid off as Alliance takes stock

Neal Wallace
Other meat companies also feel chill of weak global markets.
Reading Time: 2 minutes

Alliance Group has made 24 staff redundant while other meat companies are shedding contractors and cutting back projects in response to weak global markets.

The Alliance redundancies include three members of its livestock team in the field and staff in administration.

Chief executive Willie Wiese said the co-operative will not fill some vacant positions as part of a re-organisation of its livestock division.

Wiese said the changes follow a review of its operations after reporting a $97.9 million loss before tax for the 2022-23 year, and weak export prices.

Its financial result to September 30 was a $214m turnaround from the previous year, when it reported a record $116.3m profit.

It reflects a 25% drop in lamb prices in October and November last year, soon followed by beef, which required a revaluation of Alliance’s lamb inventory, costing the co-operative between $55m and $60m.

Subsequent global red meat markets have remained weak. According to AgriHQ data, export beef and lamb prices have been tracking well below the five-year average since late last year.

Earlier this month prime lamb prices were $6.43/kg, about $2/kg lower than a year ago, while bull is back about 50c/kg, steer 70c/kg and cow 50c/kg.

Wiese said it is responding to those weak global conditions.

“In August Alliance completed consultation processes with our people as part of a review of our operating model to ensure it reflected the needs of our farmers, our customers and the tough conditions in our global markets,” he said.

“The majority of the changes involve changes in reporting lines, scope of positions, re-deployment of people to alternative roles that suit their skills and experience and not filling vacancies.”

Wiese said the restructuring doesn’t impact the vast majority of its 5000 peak-season workforce.

“We will continue to seek opportunities to improve the efficiency of the co-operative so we can effectively navigate the business through these challenging times.”

Silver Fern Farms (SFF) chief executive Simon Limmer said the challenging global market conditions mean it has reviewed and adjusted proposed operating costs and the pace of investment.

“We are deferring non-critical infrastructure spend and pausing certain projects, including the timing of some of our technology investments.”

Limmer said the business is in good health and the board and executive are committed to its strategy and direction of travel.

“However, it is important that we adapt our pace of implementation and ensure that we are fit and appropriately resourced to benefit from an inevitable market rebound.”

Some contractor roles and the roles of those working fixed term associated with technology investments have been affected.

Limmer said labour availability across SFF’s plant network has improved compared to last season, with higher recruitment, retention, and a reduction in absenteeism.

Daryl Carran, the national secretary of the NZ Meat Workers Union, said job losses are focused on corporate head offices.

He said the return rate of meat workers has been exceptionally high this year, which could reflect a tighter job market.

A spokesperson for ANZCO said it has not made any staff redundant.

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