Alliance meat company is puzzled at overtures made by rival Silver Fern Farms on the weekend about a possible merger.

Silver Fern published an open letter in several newspapers asking its shareholders for their views on the two processors joining forces.

Alliance chairman Owen Poole says his company had no prior knowledge of the letter, and doesn’t support the merger idea. 

The merger proposal has been mooted several times in recent years and failed to win farmer or boardroom support.

Two years ago Alliance shareholders voted down the idea when it was put forward by the Meat Industry Action Group.

Silver Fern Farms chairman Eoin Garden says any merger would only be the first step on the road to long-term recovery.

"It will be a very strong and powerful business to change the strategy and the structure of the industry to put the two co-operatives together.

"Any further consolidation will be driven off that strong base.

"You could never conceive of putting three or four companies together in one move.”

Mr Garden says robust prices of late aren’t sustainable, after being pushed artificially high following the Southland storm.

“If the industry and sheep and beef producers are dependent on events like the storm [in Southland] to ramp up farm gate prices for their livestock, then our industry is not sustainable."

Alliance has rejected previous merger attempts on the grounds it would not lead to industry-wide aggregation.