Farmer owned cooperative Alliance Group has marked its 75th anniversary with a disappointing pre tax loss of $97.9 million for the year ending 30 September 2023 (FY2022 profit $116.3m).

The result is despite a group turnover of $2.0 billion (FY2022 $2.2b). 

Chair of Alliance Group Murray Taggart, said the past 12 months had been extremely difficult for both the company and farmers.

Chair of Alliance Group Murray Taggart. Photo: Supplied

"This year’s loss is very disappointing, coming off last year’s record financial result."

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

"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."

China, the group's largest export market by value and volume, is also yet to bounce back from the COVID-19 pandemic.

“There were also high levels of inventory across all proteins in various markets, particularly lower cost Australian sheepmeat, which drove pricing down.”

Global market prices for lamb fell almost 25 per cent in just two weeks in October 2022 and remained weak for the remainder of the financial year, he said.

This had resulted in a significant decline in inventory values between October and December, Taggart said.

Taggart said the Board and management have undertaken a comprehensive review of the business.

"We are taking steps to get the co-operative back on track to profitability."

"While it is early days, initial trading this financial year is tracking to expectations," he said.

Alliance Group Chief Executive, Willie Wiese said the co-operative was confident in its long-term strategy.

“We have made changes across the business in response to the tough trading environment."

"These conditions have highlighted significant opportunities for improvement."

"Solutions, ingredients and materials remain a key focus and we have identified opportunities to create greater market value in 2024 and beyond.”

Alliance Group continues to invest significantly in its plant network including the completion of a $16m warehouse automation project at the Lorneville plant in Southland and is introducing cutting-edge artificial intelligence technology to measure eating quality, Wiese said.

The Group also has a comprehensive decarbonisation plan for its plant network with projects currently underway set to achieve a 21 per cent emissions reduction during the current financial year, and a 56 per cent reduction once implemented, he said.