Meat & Wool New Zealand has welcomed the Alliance Group initiative that would see the creation of a single entity for 80% of New Zealand's livestock supply.

Alliance believes the plan would establish critical mass and improve the long-term profitability of the industry, which Mike Petersen, Meat & Wool New Zealand chairman said: "is the sort of initiative that farmers have been looking for".

"Farmers are looking for vision and direction to lift farm gate returns," Peterson added. "This initiative is definitely worthy of further analysis and we have offered to assist in any way we can. Meat & Wool New Zealand will be encouraging the meat industry taskforce, led by Sir John Anderson, to explore this concept further."

Alliance's move, to include a merger with Dunedin-based PPCS, can expect to create a company with turnover of around NZ$5bn (US$3.9bn).

Alliance and PPCS account for about 59% of sheep-meat, 37% of beef and 78% of venison national exports.

The concept will be discussed with shareholders before consultation takes place with the wider industry and other stakeholders.