Opinion: Allan Barber looks at the industrial turmoil speading to meat processors

Opinion: Allan Barber looks at the industrial turmoil speading to meat processors

By Allan Barber

The weekend’s announcement by AFFCO of a lockout at five of its North Island meat plants comes hard on the heels of the three week strike by the Ports of Auckland stevedores, following several months of increasingly acrimonious negotiations.

Unless it gets agreement to its proposal, AFFCO intends to lock out 758 of its meat workers covered under the Core Collective Agreement which expired last September and which the company has been trying to renegotiate unsuccessfully with the Meat Workers Union for some months now.

At the heart of the issue is AFFCO’s determination to assert its operational authority over the management of its plants, while the Union is equally determined to maintain manning and production speeds in addition to entitlements such as work force seniority.

In a press release issued today AFFCO states that it has “critical commercial reasons to resist the Meat Workers Union leadership’s bid to reassert operational authority at its plants.”

Three major issues are listed as:

(i) The company’s right to determine with flexibility the setting of manning and process line speeds.

(ii) The company’s right to set final determination in operational parameters for processing lines when new technology is introduced.

(iii) Dispute resolution procedures as covered in the existing Collective Agreement not being adhered to by the Union and the company’s claim to adhere to a proper dispute resolution process.

The company also wants to assert its right to introduce scientifically reliable random drug testing procedures and to decide on training for new and existing employees.

As with the Ports of Auckland dispute, it isn’t about the money, but about operational flexibility.

AFFCO has been having a festering dispute with the Union at its East Coast plant at Wairoa about manning levels and processing speeds for at least a year now and this disagreement was always likely to spread to other plants. But it should be noted that the workforce numbers faced with the lockout comprise only about half AFFCO’s meat workers with the majority of the others employed on individual agreements.

Clearly the company has long had an ambition to get out of the straitjacket imposed by a Core Collective across its whole plant network.

Back in the 90s when AFFCO nearly went into receivership, it set up its Feilding based beef plant, Manawatu Beef Packers, as a predominantly non-union plant with workers employed on IEAs. It also tried to achieve individual site agreements with its other plants which would have allowed it to compete on more equal terms with its single plant competitors, not to mention Lowe Walker which had revolutionised processing methods with newer technology and higher productivity.

At the time it needed Union support to maintain throughput and cut processing costs and for a time, under the provisions of the Employment Contracts Act, there was industrial peace and improved productivity.

But nothing ever stands still and in recent years, under Talley’s Group ownership and control, AFFCO has invested heavily in plant rebuilds, incorporating new technology and operating methods. This has ensured AFFCO’s ability to compete with its major competitors, but single plants processing only one species inevitably find it easier to negotiate industrial agreements than a multi plant operation.

Talley’s Group has a reputation for being a single-minded tough employer and, with plenty of experience running profitable businesses in other product areas (vegetables, fishing, dairy, ice cream), it is not about to let its progress be hindered by what it knows to be outdated workplace practices and agreements.

The Meat Workers Union hierarchy is made up of essentially the same people who were there in the 1980s and 1990s who have largely stuck to the old model which employers find obstructs their quest for modernisation of work practices.


Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country where he run a boutique B&B with his wife. You can contact him by email at allan@barberstrategic.co.nz or through his blog at http://allan.barber.wordpress.com

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More and faster - until...
This isn’t a New Zealand phenomenon only.  The way most worldwide economies are currently structured – based on consumerism, greed and corruption, we are experiencing all sorts of negative consequences – unemployment and strikes are just the beginning.  

I notice you differentiate ice cream from dairy; can you provide examples of Talleys dairying business and verify if they are profitable?

Sorry, but I have no idea about Talley's relative profitability for any of their business units, but I know they have strong equity levels and are generally profitable.

In full-cost-of-environmental-externalities? 
I'd be surprised.
From where I stand, both the Company and the unions are engaging in a dated debate. For years (a very few, in hindsight, and only since the Indusrtial Revolution, ie since the injection of increasing amounts of energy per time) they have fought over who gets how much of the cake.
Both assumed the cake could be grown indefinitely. Both were wrong, so both are 'behind' in their thinking. BigAg - which is just what capital attempts to do to anything; comodify and monopolise it - is yesterday's model. If you want to read the future, think back down the energy scale, as in: back down the years, but with the proviso that more is known scientifically now, and with the secondary-echelon proviso that much technology will have to be triaged.
So many from 'both sides' have no idea what is happening, or what is coming.

I think I know what you are getting at, but AFFCO's point is that they need to be able to reflect the use of new technology in their labour agreements. This suggests to me that the company, as employer, does understand that new technology is imporatnt to growing the cake.
Not sure what you mean by 'much technology will have to be triaged' - can you explain it in plain English for my unsophisticated mind?

Bit of a stretch to say it's dairy business is profitable when this was reported in the media:
The country's second-biggest dairy processor, Open Country Dairy, has posted a $29.5 million loss for the year to July, a performance it calls ''extremely disappointing''.
The loss is three times greater than the exporter recorded in 2010.

Hi casualobserver
Good point about OCD's loss, but I am pretty sure the Talley Group's 100% owned and controlled fisheries and vegetable businesses are profitable.