Weddel New Zealand, the country's fourth-largest meat processor and exporter, called in KPMG Peat Marwick yesterday after failing to secure additional bank funding. All Union and Vestey subsidiaries have been at a banking standstill since November 1991.
Weddel, which processes 10 per cent of the country's sheep kill and 15 per cent of its beef kill, blamed overcapacity and intense competition in the meat market for its demise. Competition from local farmer co-operatatives and declining stock levels have added to the difficulties.
The receivers said: 'The current problems of the New Zealand meat industry are well known and have impacted on the company, particularly in the last two years. The directors have explored every avenue to restructure the company.'
Weddel, with headquarters in Wellington and operations across North Island, has about 2,300 employees. The receivers said some staff would be retained to assist with the receivership.
Union International's chief executive, Terry Robinson, said New Zealand's strict insolvency laws meant the group had ceased trading rather than risk being accused of trading recklessly.
Though Mr Robinson has reduced debts from pounds 400m to pounds 125m in the past three years, Union, which is best known for its Dewhurst chain of butchers shops in the UK, is not allowed to cross- support other subsidiaries. Weddel sought funding from local bankers but was turned down.
Mr Robinson said the 'ring fencing' meant that the collapse of Weddel would have little or no effect on the Union group as a whole.
The failure of Weddel is the second high-profile collapse in New Zealand this year. Fortex, the South Island meat processor, went into receivership in March. KPMG, which also acted as receiver in that case, recently sold the business, increasing hopes that a buyer for Weddel may also be found.