KEY POINTS:
The meat industry has attacked the Government today over a bill it says is being rushed and will push up costs.
Federated Farmers, the Meat Industry Association, Animal Health Board and Business New Zealand all urged the commerce select committee to drop a bill to merge AgriQuality and Asure New Zealand.
The legislation was introduced in March to allow the merger between food safety and biosecurity services agency AgriQuality and export red meat inspection services provider Asure.
It also would prevent AgriQuality providing export red meat inspection services, which it had threatened to do.
The aim was to prevent competition and reduce costs between the agencies created in 1998 as part of corporatisation of some of the Ministry of Agriculture and Fisheries business units.
Meat Industry Association chairman William Falconer said the organisation was "stunned" that the Government had not consulted those who paid Asure $40 million a year and processed and marketed $5 billion of meat exports a year.
The bill had its first reading on April 3 and the committee was told to report in three weeks. This was later extended to May 7.
"I have to say that in the 47 years I have been in and around government I have never seen a major trade organisation be treated so shabbily," Mr Falconer said.
While there had not been competition between the two SOEs the potential for it was an important check against abuse of market power, he said.
Business New Zealand and Federated Farmers said the change would create a monopoly and had wider implications for the Government's state owned enterprises.
The Animal Health Board said the merger would mean a loss of competition in TB testing. Since 2003 there had been an 18 per cent reduction in test costs but prices would go up after the merger.
But AgriQuality director Paul East said the merger would give confidence in international markets, made sense financially and would mean that a large staff would be available if there was a biosecurity emergency.
Mr East said work was being done on a cost-benefit analysis, but it made sense that staff be retained to do jobs rather than be made redundant because another state-owned enterprise had taken their work.
At present there was no competition in red meat inspection and "this does not change the status quo".
Another benefit for exports was food could be traced from farm to table.
AgriQuality chief executive Tony Egan said: "All we are saying it makes very little sense for two organisations owned by the same shareholder to be going head to head and destroying value."
Mr Falconer told the committee that he believed the Government had "cut a deal" with the Public Service Association over the merger, and it exposed the industry to industrial action.
- NZPA
