Teys Bros and the Kerry Packer owned Consolidated Meat Group (CMG) have begun discussions about combining the assets of both companies to form a giant joint venture meat processing company. Their current combined capacity accounts for almost 10% of Australia’s output of meat and hides. This is not far short of Australia’s largest processor, AMH. In industry terms, CMG and Teys were 3^rd and 4^th respectively behind AMH and Nippon in a recent industry survey of the top 25 meat processors in Australia.

CMG this week announced the closure of its Rockhampton, Queensland, Lakes Creek abattoir, the second largest abattoir in Australia. A long running industrial dispute that has seen the plant operate only spasmodically over the last 12 months has been blamed for the closure, which takes effect from 4^th September.

The CMG management team however said the decision to close was not a direct result of the industrial dispute, but was purely commercial. The plant has been unprofitable and has accumulated substantial losses. The other works in the potential venture, Teys’ Biloela, Beenleigh and Narracoorte plants, and CMG’s Innisfail and Katherine plants in contrast were reported as being profitable.

Once part of the Vesty empire, the Rockhampton plant has been in operation for around 100 years. It employed up to 1500 people at its peak, and killed more than 2100 cattle per day. CMG had spent $40 million on improvements to the plant since 1999.

The news of the closure was broken to employees at a mass union meeting which ironically had been called to discuss plans to return to work following the long running dispute.

Teys Bros Chairman Alan Teys said the merged operations would be managed from Teys head office at Beenleigh, south of Brisbane, and October 1^st had been set as the tentative starting date. He added that the fact both companies were wholly Australian owned, in contrast to the two larger companies AMH and Nippon who are both under foreign ownership, was a very significant point in the decision to proceed with the venture.

The merger is likely to come under scrutiny from the Australian industry competition watchdog, the Australian Competition and Consumer Commission.

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