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Meat industry moves towards consolidation

Consolidation of the Australian meat industry is allowing companies to improve efficiency and bring the consumer closer to farmers.

Yesterday (7 July), Sanger Australia announced its merger with Bindaree beef, to form Bindaree Beef Group.

Graham Greenhalgh, CEO, Sanger Australia, says the move will bring the customers’ needs closer to the producer by removing one of the links in the chain.

Both Sanger and Bindaree have been separately selling meat from the McDonald family. “Separate share holdings, separate aspirations, separate everything and so by joining those two businesses together, we take out any issues between the objectives or visions of those two companies and we make sure we’re aligned,” Greenhalgh says.

“People are seeking and searching closer connections to the producer and have more interest in insuring the producer groups are prospering. People are becoming responsible in how they consume food and they want to ensure that the value that they’re paying for the food passes down to the farmer…so this [merger] is going to certainly help with that. We’ll have one set of objectives and we’ll be closely aligned and we think it will contribute to delivering better efficiency between the producer and the consumer.”

Over the past 20 or 30 years, the meat industry has become less fragmented, Greenhalgh says.

“The four biggest meat companies in Australia have massive financial strength, massive global positioning and I think that’s a real positive for the industry, it’s enabling investment into the industry and that investment is bringing efficiency.

“That consolidation of business allows people to invest more to drive more efficiency and to make that connection between the customer and the farmer closer and more responsive and that’s absolutely what we’re endeavouring to start doing.”

 

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