Farmer Coop Response to PGG Wrightson Merger

Farmer Cooperative CRT’s Response to PGG Wrightson Merger Proposal

In response to questions on the CRT view of the proposed PGG Wrightson merger, Brent Esler, the Chief Executive of this South Island farmer co-operative, said he believes the merger plans revealed on Tuesday are a direct result of farmers taking ownership in the input supply chain through the formation of co-operatives more than 40 years ago. This is a testimony to the foresight of farmers in the early 1960’s who established what is now CRT.

The current trends of “direct selling” and “re-engineering the supply chain” - are nothing new, CRT has been doing this for the last 40 years – as a farmer owned organisation dealing direct with manufacturers and other suppliers. The success of this movement in lowering the cost of inputs to farmers has been such that investor owned companies have been forced to consolidate to compete. This latest news that there will be just one large investor-owned firm in the market is hardly surprising. Internationally, outside of Australia and New Zealand, there are few, if any, investor owned firms competing in the farm supplies market on a national scale. These markets are dominated by farmer owned organisations and smaller regional companies.

CRT itself evolved from several mergers involving farmer owned co-operatives over the last decade. With the last of these mergers completed in 2003, it has the scale and resources to compete strongly in the farm supplies business, although there are specialised areas in PGG Wrightson where a reduction in competition will concern farmers.

CRT is targeting growth in its market and believes this latest announcement will provide further opportunity to achieve this. CRT will continue to create competition to benefit its’ farmer owners.

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