fbpx
Print this page
Friday, 20 September 2013 15:52

Farmlands move questioned

Written by 

EX FARMLANDS director Hugh Ritchie, who resigned over what he felt was a lack of adequate data to support the merger with CRT earlier this year, says he “just can’t fathom” why the cooperative has now acquired NRM.

 

The feed miller, which claims to be the biggest in New Zealand, is to be sold to Farmlands and Mainfeeds.

The move comes just six months after Farmlands merged with South Island counterpart CRT, which already had considerable feed milling capacity at Rolleston and Winton in the South Island.

“I suppose the rationale is vertical integration… but it is so far away from where the Farmlands model originally was,” he told Rural News. “They’re just adding another layer of cost.”

That original model was to get the best possible price on inputs and services for Farmlands members, he says.

“That’s quite different from just being cheaper than PGW. The aim was to keep the cost structure low and pass on the benefit.”

Ritchie stresses he’s not saying the CRT merger is what’s changed Farmlands, as it had “already gone off the rails a bit with its huge expansion of shops and vehicles” prior to the merger.

Since resigning as a Farmlands director he’s started taking tenders from multiple organisations for inputs and services to the family’s large-scale cropping business in Hawkes Bay, and says the substantial savings he’s now achieving makes him “disappointed” in the savings he formerly made by buying from Farmlands. 

“For example, we’ve taken $9000 off our phone account by going direct.”

Even after what used to be a sizeable rebate from Farmlands, his business will be considerably better off, he says.

“Our spend with Farmlands is now probably a quarter of a fifth of what it was. It used to be all our business went there regardless. Now we’re putting all our business up for tender.”

Featured

Big return on a small investment

Managing director of Woolover Ltd, David Brown, has put a lot of effort into verifying what seems intuitive, that keeping newborn stock's core temperature stable pays dividends by helping them realise their full genetic potential.

Editorial: Sensible move

OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.

National

Machinery & Products