Newspaper Article 1996 – The deal that stunned Hawke’s Bay

The deal that stunned Hawke’s Bay.

By David Curtis
Staff reporter, Hastings

The closure of New Zealand’s biggest freezing works, Whakatu, 10 years ago came with a savage suddenness on the evening of October 10, 1986.

Rumours of rationalisation plans had been sweeping the meat industry for months and although these were expected to involve Whakatu few people expected that the country’s biggest and most profitable plant would be among the fatal casualties.

Certainly not the 2000 workers and the people of Hastings, most of whom heard the decision on radio newscasts in stunned disbelief.

The manner in which the closure was announced caused anger and bitterness. It was not the way that the five companies who hatched the deal – Richmond Ltd, Weddel Crown – later to become Weddel NZ – Waitaki International, Dawn Meat and the Hawke’s Bay Farmers Meat Co. had intended, but their hands were forced when Whakatu shareholder Selwyn Cushing caught wind of what was afoot and launched a counter bid for the Whakatu shares in an effort to keep the works open. He was unsuccessful and the rest is now history.

In the outpouring of grief and anger which followed the closure the accusing finger of blame was often pointed at the faceless men of the international big business, but in many ways the deal was driven by Hawke’s Bay people or those and companies with strong links with the province.

The Hawke’s Bay Farmers’ Meat Company, as the name suggests, was once a farmer-owned company. Seeds for its eventual demise were sown when the break-up of family farms provided an opening for commercial interests to pick up shares in the unlisted company from the sons and daughters who were no longer involved in farming.

Waitaki International, then the biggest player in the New Zealand meat industry, eventually gained a controlling interest[.]

Waitaki was a subsidiary of Wattie Industries, the canning company established by the late Sir James Wattie in Hastings. Although managed from Auckland its main production base remained in Hastings. The managing director of Waitaki was Athol Hutton, a former managing director of the Hastings-based stock and station agency, the Hawke’s Bay Farmers Co-operative Association.

Waitaki International no longer exists. Watties was swallowed up by Goodman Fielder which eventually moved to Australia and later sold its Wattie assets to the giant international, Heinz, headed by the Irish business magnate, Tony O’Reilly, whose publishing empire now includes this newspaper and the Napier Daily Telegraph.

Weddel, although part of the vast United King [Kingdom]-based Vestey empire, also had strong connections with Hawke’s Bay. Its biggest works were Tomoana in Hastings. Weddel’s collapse two years ago and the closure of Tomoana was in human terms as devastating as Whakatu’s with another 2000 workers losing their jobs. For a period Weddel moved some of its operations to Whakatu and it became known as Tomoana North. Parts of Tomoana have since been modified to enable Watties to increase its product base under the expansion plans of Heinz and Dr O’Reilly.

TWO SURVIVORS of the Whakatu deal remain. Both are still solidly-based in Hastings – Richmond Ltd and Graeme Lowe.

As part of the deal Richmond, who until then had no killing plants of its own and relied on not-always-apparent goodwill of its competitors, gained the Hawke’s Bay Farmers new-three chain works at Takapau, Oringi near Dannevirke which was built by Mr Lowe’s Dawn Meat, and that company’s beef processing plant, Pacific, at Whakatu.

Mr Lowe was left to go it alone through Lowe Walker NZ Ltd which now operates as a meat processor and exporter with operations in Hastings, Paeroa, Te Aroha and Dargaville.

The big winner was Richmond with John Foster, who was general manager of Dawn Meat, becoming its chief executive officer.

Today it is the most significant player in the East Coast region with a turnover of nearly half a billion dollars a year and a staff of 2052. Besides Takapau, Oringi and Pacific, it has plants at Waipukurau, Hastings, Otaki and Te Kauwhata.

Closure still sends shivers down his back- some of the key players in the Whakatu deal look back … page 13