Labour wants to meddle in meat industry

Labour loves to meddle in businesses where it has no business to be and if it gets into government it will be meddling in the meat industry:

Labour will create more jobs and wealth by providing the leadership and funding to help participants reform the meat sector through developing a larger scale sustainable model as part of our Economic Upgrade for the sector, Labour’s Primary Industries spokesperson Damien O’Connor says.

“The meat sector continues to decline and must meet new challenges to maintain a secure and skilled workforce. Like our wider economy it needs an upgrade to compete overseas.

“Labour will do this by encouraging the creation of businesses with real market scale and, if required, we will look to amend the Commerce Act to achieve this aim. We will also work with Iwi and large agricultural companies to consolidate efforts and interests for the long term. . .

The meat industry is dominated by two farmer-owned co-operatives and there are also several smaller players.

What they do and how they do it is primarily the business of these businesses and their shareholders.

Minister for Primary Industries Nathan Guy has repeatedly, and correctly, said he will not intervene unless there sector comes up with a plan supported by the players which requires his assistance.

Anything else would be interference in private enterprise where the government has no right to be.

The industry does have challenges but Guy, and the National Party, understand any change in the meat industry must come from farmers and the processing companies.

Any attempt to impose a solution from the government down would be expensive and have the potential to contravene free trade agreements.

14 Responses to Labour wants to meddle in meat industry

  1. Andrei says:

    I think I will set about building a “political rhetoric” generator which will allow a political hacks and wannabes to enter the subject upon which they wish to pontificate and it will spit out turgid prose containing phrases like

    providing the leadership

    create more jobs

    sustainability

    meet new challenges

    and so forth.

    That press release is dreary empty stuff that is almost totally devoid of any real meaning

  2. Mr E says:

    I predict this policy will be popular with some farmers. And I think this is a clever move by Labour.

    I predict it will be very unpopular with small meat companies – and there a quite a few of them. If bigger gets more, smaller lose competitiveness and potentially market share.

    I am curious to hear from Labour more specific details before I form my own view of the policy.

  3. homepaddock says:

    Some farmers will like it but more won’t.

    It will be unpopular with the big companies and most of their shareholders too because political meddling will be very costly for them.

    It is far more expensive to close a plant than to open one. If any amalgamation is forced, it will provide an opportunity for other companies with much lower costs to start up in competition.

    The mega-merger proposed by then-Alliance chair Owen Poole a few years ago, might have worked if the other companies, and farmers, had bought into it but it was scuttled before it got off the ground.

    Anything imposed by government is doomed to fail and it will be farmers who pay most dearly for that failure.

  4. Gravedodger says:

    I seriously think the challenges revolve around countering the insanity of thinking from all parties around the false premise that the government should be involved in management when they should be only in facilitation and maintaining their distance.

    Ron Reagan summed it up with his prescient admonition of the scariest thing a bureaucrat can utter.
    “Hi I am from the government and I am here to help”

    Damien O’Connor is a very worrying person, his occasional outbursts that deliver a hope of reasonableness from a Labour Acolyte are nothing in his relationship with his mother ship.
    He is as committed and interventionist as any, only he has a regard for reality forced on him by his home environment that although giving birth to the original NZLP centered in Blackball has relevance, he is a true believer and any thought he is like Shane Jones and could be consigned to the touchline is absolute garbage.
    Watch his lips, when they move he is adept as any at spouting the basic socialist mantras and his Brother is no different it is in their bones.

    If consumers are concerned with domestic meat prices they aint seen nothing if Kiwibutcher evolves.

  5. Mr E says:

    Ele,
    Mergers have not happened because of the cost to the industry – we agree. If Labour incentivises a merger it could come at a lesser cost to the industry.

    I believe a majority of shareholders want more cooperation between meat companies. For many that means mergers. And it appears obvious, with the continual replacement of board members with MIE and MIAG activists.

    This is clever stuff by Labour. Mind you Damien has been banging this drum for sometime. And labour still sit poorly in the polls.

  6. homepaddock says:

    MR E – what happens when MIE and MIAG activists get on boards? They come to understand why what they’re proposing won’t work and accept the company line.

  7. Mr E says:

    Ele,
    “They come to understand why what they’re proposing won’t work and accept the company line.”

    Are you assuming a lot with that statement? You will know a minority can not do a lot. You will also know that fiduciary duty is a requirement of board members. Towing the company line can be a must do.

  8. homepaddock says:

    Board members are legally bound to do what’s in the best interests of their company. That’s why they find that ideas they had before they were elected aren’t possible to implement once they’re on the board – they’re not in the best interests of the company.

  9. Mr E says:

    Both Alliance and SFF have promoted a merge at separate times. I guess board members met their duties to come to these conclusions.
    To say with absolution that it’s a bad idea. Seems flawed to me.
    More important to National is what the voter wants and a significant percent want a merge from what I see.
    National will need to take care to say it opposes interference rather than a merge if it does not want to deter voters.

  10. homepaddock says:

    If farmers want a merger they can become shareholders and vote for one.

  11. Mr E says:

    Who is going to provide the resolution Ele? Who would have spent the 10s if not 100s of thousands in research to put forward and market a merge proposal?

    Leadership is needed for such things to happen. I for one am happy that Labour is asking questions about what can be done to support the sector.

    Now it is Nationals turn to put some thought forward. I think a better thought process would be supporting the independent review of multiple opportunities for collaboration/cooperation/unity in the sector. It is not unrealistic to expect the Government to review long term opportunities for the sector, in my view.
    I doubt anyone would not welcome a review of opportunities.

  12. homepaddock says:

    That leadership must come from the industry and farmers.

    If the government is the answer to the meat industry someone’s asking the wrong questions.

  13. Mr E says:

    Nobody is suggesting the Government is the answer.

    But to think the Government cannot be part of the solution is short sighted. And it reckon it should be involved in the leadership in finding solutions to these problems.

    The Government provides leadership in other industries like oil, minerals, film and others. Why not meat?

  14. homepaddock says:

    http://www.beehive.govt.nz/speech/speech-red-meat-sector-conference

    “The last thing the meat sector needs is a plan dictated by a Labour-Greens-Mana Dotcom Cabinet, with no grassroots support.”

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