Thursday, 03 December 2020 05:55

'Doffing' claim hits Alliance result

Written by  David Anderson
Alliance chair Murray Taggart has described the past year as 'challenging'. Alliance chair Murray Taggart has described the past year as 'challenging'.

An historic employee entitlement claim of nearly $20 million severely dented meat processor Alliance Group’s annual result this year.

The company has announced an underlying profit of $27.4 million on turnover of $1.8 billion for the year ending 30 September 2020.

However, a $19.9m provision – relating to the historic employee entitlement claim – saw its annual profit drop to $7.5 million before tax.

The meat processor says it is trying to resolve the claim for “historic partial non-compliance for employee entitlements” – known as donning and doffing – with a proposal waiting for ratification by the New Zealand Meat Workers Union.

Alliance’s poor result means there will be no profit distribution to shareholders this year. Chair Murray Taggart says the result reflects the “challenging operating environment” for the company in 2020.

Despite this, he claims it was a “credible performance for the company” – given the disruption and volatility in global markets due to Covid-19.

“The co-operative has faced challenges on many fronts. Like many businesses, we have been impacted by the pandemic,” Taggart says.

“However, our farmers also experienced extreme weather including drought, snow and flooding in parts of the country and difficult growing conditions.

“These on farm challenges also flowed through to the co-operative.”

Chief executive David Surveyor says the company’s response to these challenges was pleasing.

“We are proud of how our people across the business responded to the Covid-19 situation. Our people went above and beyond to deliver for our farmers, our customers and the country.”

He adds that while the season began with high protein prices for red meat, driven in part by African Swine Fever impacting the Chinese pig herd, there was a price correction as China took measures to curb protein inflation which reduced farm gate lamb prices.

“This was further compounded by the spread of Covid-19 across the globe and the resulting lockdowns, which resulted in people movement restrictions and massive disruption to the food service sector.”

Covid-19 also impacted Alliance’s processing operations with new operating protocols limiting capacity for farmers.

Surveyor says this year’s result excludes any money the company may be eligible for under the Government Wage Subsidy Scheme.

“Alliance and the Ministry of Social Development are currently working in a principled and constructive manner to resolve the amount Alliance is entitled to retain,” he explains.

“None of this amount will be recognised until discussions with the Ministry of Social Development are complete.”

He says the company has already returned money that was “not required for the purpose of retaining jobs and income.”

More like this

Alliance Group's online sales surge

Online sales via Alliance Group’s online red meat delivery channel puresouthshop.com have grown significantly during the Covid-19 alert level restrictions.

National

China demands, NZ delivers

Meat Industry Association chair John Loughlin says China is one of the most demanding export markets in the world.

Winds a major blow

Farmers with irrigators blown over and damaged in a pair of back-to-back windstorms may not get them working again this…

Machinery & Products

Helps tame the wind!

Amazone's recently released WindControl System automatically monitors and adjusts the spreading pattern to compensate for the effect of the wind…

First Claas patent hits a century

While Claas has registered more than 3,000 patents during its 108-year history, the company is currently celebrating the 100th anniversary…

JD invests in robotics

Global giant Deere and Co has acquired Silicon Valley start-up company Bear Flag Robotics, which specialises in autonomous driving technologies…

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Murky waters

OPINION: Your canine crusader knows there is a great deal of unease - especially in rural NZ - about the…

Who?

OPINION: The refusal of both Damien O'Connor and PM Jacinda Ardern to release some of the correspondence they received about…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter