News this morning that a mega-merger between rival meat companies PPCS and Alliance is being talked about. I’ve said for awhile that Fonterra is an example of what good can come from mergers. Fonterra has created a dairy industry that is diversified, both geographically and in terms of product line. It markets a value added product and considers itself as much an IP company as a production one.
The meat companies however are where the dairy companies where before Fonterra was created. Basically they are price takers selling a completely commodity based item (cut up dead sheep and cow basically) to whomever will buy it. It just seems so ludicrous when essentially the dairy and meat industries are in similar positions that one industry is building the value while the other is steeped in the days of old.
The question remains whether the meat companies have the vision and leadership to put petty egos and empires aside and build something that could prove beneficial to all – given what I have witnessed from the meat companies I’m not overly confident that they can.
Note – this post does not address in any way the environmental impacts of increased dairying on New Zealand or the planet. I’ll leave that analysis for others!