AHEAD OF THE HEARD
After a couple of years of circling around each other, the two beef promotion and marketing agencies, the Beef Information Centre (BIC) and the Canada Beef Export Federation (CBEF) are about to be merged into one big agency to be called Canada Beef. At least that’s the plan, but in many ways it was both inevitable and an evolution.
At the behest of a number of provincial cattle producer organizations, both agencies had been encouraged for many years to find ways and means to cooperate and perhaps even to amalgamate in order to save duplication costs and create a bigger better promotion agency. But as expected, that premise was hobbled by the usual cattle industry politics. Both organizations were also very differently structured, had different management cultures and mandates, and were headed by strong dynamic CEOs, both of whom had their own ideas about cooperation. Both organizations had studies done which suggested a strategic alliance, which was not exactly a ringing endorsement of real cooperation. It was suspected that the only way the two organizations could really cooperate was if one took over the other - and neither agency was willing to be taken over by the other. So a stalemate developed and the push would have to come from somewhere else and it did.
The Canadian Cattlemen’s Association, being the godfather of both BIC and CBEF, quietly nudged all the stakeholders and vested interests to agree to develop a merger concept, and a group called the Canada Beef Working Group was created to take action. They developed a report that recommended that not only the two marketing groups, but the national checkoff agency which oversees the collection and distribution of all Canadian domestic and import cattle and beef checkoffs, be merged into one beef promotion and marketing agency. This new Canada Beef organization would carry out all of the programs of the existing agencies. The agency model seemed to be the Australian and New Zealand meat marketing organizations both of which are integrated, sophisticated global beef marketing agencies and fearsome competitors against Canadian beef. A stronger Canadian agency could at least give both of those foreign groups a more equal run for their money. A bigger, more sophisticated and better financed Canada Beef would also be in a better position to take on the Americans in their own market.
The merger report anticipates savings of $1,300,000, most of which will come from reduced staff salaries at $800,000. It was noted that as the Canadian cattle herd shrinks, less checkoff money will become available to promotion agencies, hence the need to streamline into one agency to save money. However, the additional income generated by a single agency will be offset at least in the first year or two with anticipated merger transition costs of about $1,200,000. The report anticipates that 12 staff positions will be lost in the transition.
The report states that changes will be in the works for senior managers. The three present CEO/President positions will all be consolidated into one. That will come as bad news to those individuals holding their present CEO positions. The report recommends a recruitment process be begun to hire just one CEO for the new organization. The loss of either the present BIC CEO or CBEF CEO would be significant as both are valuable dynamic managers who have guided their respective organizations into very successful promotion entities.
In retrospect the merger was inevitable, after-all, they were both similar agencies promoting the same product for the same cattle producer. With the right management and an invigorated mandate Canada Beef will take beef promotion and market development to a higher level with a determined and secure focus.
The directors of BIC, CBEF and the national checkoff agency will soon have to make critical decisions about the future of their organizations. I expect the direction of those decisions are a foregone conclusion as the momentum has been set with the merger report. Time will tell, of course, as to the success of the merger and the new Canada Beef organization. For the cattle and beef industry as a whole it is a good evolution.