Dawn Meats chief executive Niall Browne’s victory lap in New Zealand last week ended with him as poster boy at the inaugural EU-New Zealand Business Summit in Auckland.
Earlier in the week, the Irish meat boss had been at the other end of the country as the 4,300 farmer shareholders of Alliance Group backed Dawn’s 270 million New Zealand dollars (€132 million) offer for a controlling stake in the Invercargill-based exporter.
At the summit, pictured next to New Zealand’s prime minister, Christopher Luxon, Browne had the look of a relieved man after seeing off a last-minute challenge from high-profile Alliance shareholders eager to keep the meat co-operative under New Zealand control.
Looking just as relieved was Luxon, who had a living, breathing example of a major European chief executive with money to invest to parade in front of the hundreds of businesses at the Auckland event.
In the New Zealand meat industry, however, there has been much head-scratching at Dawn’s pursuit of the country’s biggest lamb processor, and third-largest overall.
The 93 per cent premium for shares in a company that had run up losses of $200 million in 2023 and 2024 and whose bankers were breathing down its neck due to its high level of debt made it seem a full price.
Viewed alongside declining livestock numbers and the industry’s seemingly intractable problem of excess processing capacity, it appeared generous.
And then there were the touted benefits to customers of beef and lamb year-round, augmented by out-of-season supply from Alliance.
Browne let slip that he had been visiting New Zealand for 20 years buying lamb from Alliance, prompting the question as to what new sources of supply there were to tap.
It also fuelled suspicions that the counter-seasonal argument was merely a line to win over sceptical farmer shareholders.
Dawn’s real interest is thought to lie in scaling up Alliance’s smaller beef operation. Unsurprisingly, New Zealand beef exporters aren’t welcoming more competition in the local livestock market at a time when margins are already thin.
“The only way to get a material beef business is to rip the heart out of the procurement market,” one predicted. “Dawn will learn quickly that is not a recipe for making money.”
Time will tell.
