Alliance meat company scorns proposed court action over wage subsidy

Alliance Group paid back half of the wage subsidy it attained. Photo / Getty Images

Proposed court action against meat company Alliance Group over it repaying only half a $34.3 million Covid-19 wage subsidy claim is "spurious and unfounded", says its chairman.

Murray Taggart said the farmer-owned cooperative, which recently said it had returned $17m of the subsidy, had not been notified of any judicial proceedings.

Professional campaigner Simon Lusk is seeking leave of the court to bring a private prosecution against some of the company's non-executive directors for Alliance's "disgraceful" failure to completely repay the wage subsidy.

The taxpayer-funded subsidy programme paid around $111m to meat companies, a sector deemed an essential service and allowed to keep working in lockdown.

The meat industry reported record export sales this year.

Taggart said the company had been open and upfront about the wage subsidy.

"We have been in ongoing discussions with the Ministry of Social Development about the application of the subsidy and stated from the outset that we would return any funds not used to pay people. In line with that commitment, we have returned $17 million of the subsidy.

"The support from the Government has meant we were able to maintain the employment of our people and ensure their earnings were not impacted during the Covid-19 lockdown.

"We were also able to continue paying those people with underlying health conditions aged over 70 who were unable to work during the lockdown and those on stand-by to cover absenteeism."

Taggart said the company's application was supported and endorsed by the NZ Meat Workers Union.

"Alliance Group predominantly processes sheep and the nature of our processing means we were more severely affected by the Covid-19 operating restrictions than other companies.

"From the beginning, we have applied the subsidy to the right people in the right way."

Lusk said the company paying back some of the subsidy was "incomprehensible".

"They either have a fall in revenue of more than 30 per cent in which case they are entitled to keep the entire amount, or they have not had a fall in revenue of more than 30 per cent and they should pay back the entire amount.

"Alliance is a strong profitable company that should be doing its part in helping rebuild the economy. The retained wage subsidy is less than the profits they made last year. Instead they chose to take corporate welfare.

"They may be able to justify doing so, but they may not, and it is important that an impartial referee adjudicates," said Lusk.

The largest meat company claimants were Silver Fern Farms, paid $43.2m for 6161 employees, Alliance Group, which received $34.3m for 4913 staff, and the Anzco group of companies which got $17.3m for 2478 employees.

Silver Fern Farms repaid the subsidy in full in July.

Herald inquiries suggested the wage subsidy was claimed for around 13,500 of the meat industry's estimated 22,000 employees.

Several smaller meat companies also claimed the subsidy.

But some large industry players did not. They included Affco, Greenlea and Hellaby, which between them employ more than 6000 people.

Alliance posted a before-tax profit of $20.7m for FY19. Silver Fern Farms, half-owned by Shanghai Maling (Hong Kong) and half by a New Zealand farmer co-operative, announced a $70m net profit for FY19. Japanese-owned Anzco posted record revenue of $1.7b and a net profit after tax of $22m. Operating cashflow was $140.7m.