Alliance Group repays 50 per cent of wage subsidy millions

Alliance says it was harder hit than other meat companies by Covid lockdown. Photo / File

Meat company Alliance Group has repaid about half the $34.3 million it claimed as Covid-19 wage subsidy.

Chief executive David Surveyor said the farmer-co-operative exporter had returned $17m.

"Throughout the process, we have been in ongoing discussions with the Ministry of Social Development over the application of the wage subsidy. We said at the outset we would return any funds not used to pay people and can confirm we have since returned $17 million of the wage subsidy."

The taxpayer-funded subsidy programme paid around $111m to meat companies, a sector allowed to keep working in lockdown and reporting record export sales.

The largest 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.

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. Alliance posted a before tax profit of $20.7m for FY19. Japanese-owned Anzco posted record revenue of $1.7b and a net profit after tax of $22m. Operating cashflow was $140.7m.

Surveyor said taking the wage subsidy meant Alliance was able to maintain jobs and ensure employees' earnings were not impacted during the lockdown.

"We were also able to continue paying those people with underlying health conditions or aged over 70 who were unable to work during the lockdown and those on stand-by to cover absenteeism. Our application for the wage subsidy was also supported and endorsed by the New Zealand 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 been committed to applying the subsidy to the right people in the right way."