Alliance reports $70 million loss

By earthnews
1 year Ago

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Photo: Supplied / Alliance

Meat company Alliance has reported a loss after tax of $70 million for the year ended September – a big flip from last years $73.6 million dollar profit.

The loss means the co-ops 4,500 farmer shareholders, won’t get a distribution payment this year.

Alliance group chairperson Murray Taggart said it has been an extremely difficult year for the company.

He said 2023 was the seventy-fifth anniversary of the formation of Alliance, “but it has not been a year to celebrate”.

Like all red meat processors, Alliance faced significant volatility as a result of geo-political tensions, labour constraints, inflationary pressures and weakening global markets, he said.

Softer demand from China and people tightening their spending caused prices to fall in October and they never recovered, compressing profit margins.

Taggart said global market price for lamb fell almost 25 percent in just two weeks in October.

“As a result, the co-operative recorded a significant decline in inventory value between October and December 2022, driven by the challenging global markets

“China, our largest export market by value and volume, has yet to bounce back after the COVID-19 pandemic, globally, high interest rates and inflation eroded consumers’ discretionary spending.

“Fewer people dined in restaurants, and more people swapped higher priced red meat proteins such as lamb for less expensive white meats in their weekly grocery shop.”

Taggart said the board and management have undertaken a comprehensive review of the business and we are taking steps to get the co-operative back on track to profitability.