Home' Greymouth Star : July 17th 2015 Contents Greymouth Star
4 - Friday, July 17, 2015
We appreciate the value of the Letters to the Editor
column as a public forum for West Coasters and
welcome your opinion and suggestions.
Letters may be submitted by post, fax or e-mail and
must include your name, address, phone number
and — except for e-mails — your signature. Noms
de plume are not accepted.
Please keep your letters honest, respectful and
within 300 words. Letter writers will generally not
be published more often than weekly. The Editor
reserves the right to edit or not publish letters,
especially those that are offensive or too long.
Post to PO Box 3, Greymouth, fax to 768 6205 or
e-mail to email@example.com
uLetters to the editor
1429 - With St Joan of Arc standing by,
Charles VII is crowned king of France in
1762 - Peter III, Tsar of Russia, is
assassinated a week after he abdicates the
throne. His wife, Catherine II, who
suspected Peter was going to divorce
her, conspires to overthrow him and
becomes Empress of Russia.
1841 - The humorous magazine
Punch is first published in London.
1903 - US -born artist James
Whistler, noted for the famous
portrait of his mother, dies.
1917 - The British royal family adopts the
1936 - Spanish Civil War starts as General
Francisco Franco leads army forces in revolt
against the government.
1955 - Disneyland, the first Disney
amusement park, opens its gates in Anaheim,
California. Arco, a small town in the US state
of Idaho, becomes the first to get nuclear-
1959 - Death of US blues and jazz singer
uWest Coast yesteryear
uToday in history
Isaac Watts, English churchman (1674-
1748); James Cagney, US actor (1899-1986);
Phyllis Diller, US comedian (1917-
2012); Juan Antonio Samaranch,
former IOC president (1920-2010);
Donald Sutherland, Canadian
actor (1935-); Diahann Carroll,
US actress-singer (1935-); Camilla,
Duchess of Cornwall, British Royal
(Camilla Parker Bowles) (1947-);
David Hasselhoff, US actor (1952-); Angela
Merkel, German Chancellor (1954-).
“Every soul is a melody which needs
renewing.” — Stephane Mallarme, French
essayist and poet (1842-1898).
do what is good, evil lies close at hand.”
— (Romans 7:21).
shortly before 3pm
to seek a definition
of the degree of
carelessness which constitutes manslaughter,
the Greymouth jury trying James McGuinness,
17, of Dunollie, for the murder by shooting of
his father, at 3.40pm found him not guilty of
either murder or manslaughter.
McGuinness is alleged to have shot and killed
his father Patrick Edward McGuinness in the
early hours of Easter Sunday. The indictment
was one of murder.
When he recalled the jury, His Honour
Mr Justice Perry said that its decision must
be unanimous. He said culpable homicide
occurred when a person meant to kill and cause
death or bodily injury that was likely to cause
death and was reckless whether death occurred.
He further emphasised that if the jury decided
an element of provocation was present, the
accused may be judged on manslaughter.
“Accused should be judged not guilty if a
decision is reached that the shooting was
unintentional and accidental. ”
Four men who either came from the West
Coast or have ser ved here will be in Cyprus
for the next tour of duty by the New Zealand
police peacekeeping force. Inspector B Kelly,
sergeant P J Mears and constable F D Pickens,
who was born here, will go to Cyprus with the
new party and constable R E Currey, who is
already in Cyprus, has elected to stay there for
a further term.
The names of the 17-strong New Zealand
contingent were announced by the Minister
of Police, Mr Allen, after a selection course at
Trentham. Inspector Kelly will be officer in
uFood for thought
Printed and published by the
Greymouth Evening Star Co Limited
3 Werita Street, PO Box 3, Greymouth
03 769 7900 (office)
769 7913 (editorial)
768 6205 (fax)
03 769 7913
03 755 8422
At a recent Work Safe NZ meeting
at Paroa, a department employee was
introduced and he referred to himself as
being the deputy chief inspector of mines.
However, this person had no background
of practical experience in underground
mining, coalmining or any other.
Having since researched the situation
with like developed countries, none has
any person in such an important position
who did not possess the necessary
Unfortunately, the situation is very
similar to New Zealand being the only
country in the world that permitted a
coalmine to place its main ventilation fan
underground; the site concerned was Pike
In simple terms, such a title should not
be what any party is referred to if they
have not clocked up the hard yards and
experience at the coal face. For the entity
now tasked with health and safety in the
workplace to refer to an employee as being
the ‘deputy chief inspector of mines’, is at
the very least, misleading and an affront
to those who have held such positions in
For example, you never refer to the
hobby rock collector as being a geo-
technical engineer. For Work Safe NZ to
refer to its employee as being the deputy
chief inspector of mines is quite wrong any
way you look at it in the context of what
The person concerned is certainly
capable and knowledgeable about mining,
however it would be far more appropriate
to refer to him as being a mining co-
ordinator, or perhaps a mining liaison
manager. Referring to him as the deputy
chief inspector of mines is not appropriate
— it is a misnomer. Has bureaucracy not
learned anything from the deception that
took place at Pike River?
I am totally against the council spending
any rates money beautifying the central
business district in Greymouth.
In the winter it is freezing and windy. Fix
the drains so we do not need gumboots
when we cross the street during a
downpour. Fix the shoddy footpaths that
are everywhere. Some places in Dobson do
not even have footpaths.
It is time the councillors got off their
butts and walked. We are an ageing
population and need smooth, wide
footpaths for our walking sticks, walking
frames and wheelchairs. Put the ratepayers
ahead of tourists.
Has the old courthouse been considered
for converting into a mini mall, with
History House and the art gallery on the
My view is that there should be a large
mall built at Kaiata Park, where the land
is freehold, less likely to get tornadoes, you
do not have to worry about the rising sea
and have no fear of a tsunami. We could
get our public bus ser vices back.
I was pleased to see that someone saw fit
to make comment on your article, ‘ Women
caught in 1080 drop still sick’ (Greymouth
Star, June 29), as I have been stewing over
How can it possibly take over 12 months
to look into something as obvious as what
went on that day? The thing that springs
to my mind is that all concerned are
hoping that this will pass and that they
will be able to sweep it under the mat with
all the other errors that have been made
concerning this deadly poison.
We have all the dead cattle, sheep, deer
and domesticated dogs, the spreading
of 1080 from Kumara to Christchurch,
dropping of 1080 on the Haast highway,
not to mention the thousands of native
birds ... which brings up another point.
A person is being charged with having
a native wood pigeon on his person, yet
Ospri-Tb Free, DOC etc can kill them in
their thousands and say what a great job
they are doing.
Seems to me they will have to invest in
a far bigger mat before they finally realise
the error of their ways.
With regards to the recent story which
appeared in the Greymouth Star on
the new St John health shuttle ser vice
(Greymouth Star, July 6).
Thank you very much for the generous
support and publicity of this fantastic
new service for the communities
of Greymouth, Hokitika and the
surrounding areas. St John is pleased to
be introducing this new joint initiative
for these communities.
We would like to clarify that the
support St John receives for its health
shuttle programme is South Island-based
only, not across New Zealand, and is
provided by Four Square supermarkets in
the South Island. They support shuttles
right across the South Island.
Their generosity and regular support
of our health shuttles allows us to help
many people get to health-related
appointments, people who may not
have access to regular transport and
would other wise struggle to reach these
We are incredibly grateful to Four
Square Supermarkets South Island for
their ongoing support of all St John
health shuttles in the South Island.
St John fundraising and marketing
manager, South Island
he knives are out at the
Mad Butcher and it has
nothing to do with slicing
On one side you have
got founder and brand
ambassador Sir Peter Leitch, chief
executive Michael Morton and Veritas
Investments, the NZX-listed company
that acquired the chain in 2013.
On the other is a group of former
franchisees who are deeply unhappy with
their experience in the 39-store network.
They claim an increase in fees collected
by the franchisor from meat suppliers is
erasing already thin profit margins and
making it tougher to compete against
aggressive supermarket discounting.
There are stories of brutal price wars
with rivals such as Pak ‘n Save, marriage
breakdowns, bankruptcies and heated
meetings between company management
and store owners looking for a way out of
Several former franchisees, who spoke
on condition of anonymity, say a recent
spate of store liquidations is the tip of the
iceberg and as many as 12 more outlets are
facing financial distress.
Veritas, which denies that claim but
will not provide a figure on how many
outlets are struggling, confirmed that eight
Mad Butcher store operators have been
liquidated since October 2012.
In April it emerged that four of those
outlets — in Glenfield, Kapiti, Massey and
Rotorua — had been placed in liquidation
Ownership of all but the Rotorua store
has been transferred to Veritas.
Debts at the Kapiti outlet had ballooned
to an estimated $853,000, including
$308,000 owed to the franchisor, when
it went under in March, according to the
first liquidator’s report. And the Glenfield
store has gone through three failed
operators since 2009.
Meanwhile, shares in Veritas — which
raised $25 million at $1.30 a share to
partly fund its acquisition of the butchery
chain — have fallen 49% since this year’s
high point on February 3 to open at 68c
The Mad Butcher story begins in 1971,
when Leitch opened Rosella Meats
in Mangere, which was subsequently
renamed the Mad Butcher.
He identified a lucrative niche supplying
affordable meat in Auckland’s blue collar
areas, in the days before the expansion of
The brand grew rapidly through the
1980s and 1990s, with the first franchised
outlet opening in 1998.
The idea behind chains like the Mad
Butcher, Aussie Butcher and Export Meat
Warehouse is that their combined clout
makes it possible to purchase product in
bulk and offer more competitive pricing
than independent butcher shops.
Morton, Leitch’s son-in-law, acquired
15% of the franchisor company, Mad
Butcher Holdings, in 2001, taking full
ownership in 2007.
Veritas acquired the business in 2013,
paying $20m in cash and another $20m
in shares to Morton, who remains the
investment firm’s biggest shareholder, with
a roughly 34% stake.
Veritas has since made more acquisitions,
including upmarket grocery retailer
Nosh Food Market and the Better Bar
Company, whose businesses include the
O’Hagan’s and Danny Doolans pubs in
Auckland’s Viaduct Harbour.
The company earns revenue from the
Mad Butcher through a number of
channels, including advertising fees,
supplier rebates, carcase sales margins and
The size of the supplier rebate is a
common complaint among former store
Sources say it increased from 3% of
the value of product supplied to stores
in Leitch’s time to 7% under Morton’s
ownership — a claim he disputes.
While meat suppliers pay the rebate, not
the franchisees, there is a perception that
suppliers lift their prices to compensate
for the rebate, which in turn crimps
franchisees’ profit margins.
“There’s not a business in the world that
can cope with 7% being sucked off the
bottom line,” says one former store owner.
Another says store margins “just got
smaller and smaller until there was
nothing in it at the end.
“ With the cost structure, our pricing was
too dear,” he says. “ We couldn’t compete
with the supermarkets. ”
Disputes are hardly unknown in
franchise systems such as the Mad
Butcher and Morton does not hold back
when detailing what he thinks of those
who blame him for their business failings.
“If you’re not making money, go and
have a look in the mirror and you might
find the problem,” he says. “ But nobody
wants to admit that. They want to blame
somebody else. ” Leitch is even more
forthright than his son-in-law: he calls the
anonymous critics “gutless” and “low-lifes”.
“People like that I’ve got no time for,”
he says. “ I think there’s a group of former
franchisees who are out to do a hatchet job
on him (Morton).”
Leitch says it has been disappointing to
see stores facing difficulties. “ I may not
own the company now but I spent 38 years
of my life building it, maybe more to be
fair, but I’m more than happy with the way
Michael runs the company. ”
Morton says claims that the rebate
increased from 3 to 7% are incorrect.
Misconceptions about the rebate exist
because franchisees are not privy to the
arrangement, which takes place between
suppliers and the franchisor, he says.
Morton says the rebate was about 5% in
Leitch’s time and increased to 7% under
his ownership for only three suppliers,
which he will not name.
“The stores that are struggling are
not struggling because of that (rebate
Morton says the success or failure of
stores is in the hands of their operators.
“ It comes down to their processes ... how
much value-added did they do to the
product? How much trimming did
they do? Are they prepared to buy more
bodies of beef in and break more bodies of
beef down rather than buying mince trim
Morton says making a store profitable
can be complex. “A good butcher should
have those skills, but it will vary,” he says.
Mad Butcher franchisees are restricted
to purchasing product from a list of more
than 30 approved suppliers such as Tegel,
Wilson Hellaby and Affco.
“They can play one supplier off against
another (to get better pricing) ... and
some franchisees are a lot better at
doing that than other franchisees,”
He rejects claims that he has acted in
a threatening manner during meetings
with franchisees who wanted to get out
of struggling stores. “ What I’ve said in
meetings is, ‘Don’t just think you can walk
away from your debts. Don’t believe that a
liquidator is just going to make this all go
Leitch admits that Morton’s
management style is different from his.
“ He’s a bit harder than me.”
For his part, Morton says the Mad
Butcher is “his baby”. “Am I passionate
about it? Yeah ... Do I think I’m a prick to
the franchisees? Nup, I don’t think I am. ”
Morton will not provide a figure on how
many stores are facing financial difficulties,
but says claims of up to 12 stores being in
trouble are “ just ridiculous”.
“Any franchise that has 39 stores will
have stores that are struggling and not
making money,” he says. “ That has always
been the case.”
Matt Goodson, of Salt Funds
Management, which holds a 7.6% stake in
Veritas, says the Mad Butcher is not a big
concern for him and he is more focused on
the performance of the bar business.
“A number of (Mad Butcher) franchises
are performing very strongly, some haven’t
and there’s always going to be the usual
retail reasons such as wrong location,
poor store operation or strong local
competition,” says Goodson. “If you look
at any national retail chain, there will
be shops that will be shooting the lights
out and others which are marginal or
loss making. ” Veritas expects to generate
revenue of between $32m and $34m from
the Mad Butcher in the current financial
How well individual stores are
performing is impossible to know, given
that the chain does not reveal such
Providing affordable meat is the Mad
Butcher’s bread and butter. But one former
franchisee says supermarket chains, which
have undertaken a major expansion in
recent years, have become impossible to
“ With Pak ‘n Save, one store is just
as powerful as five or six Mad Butcher
stores,” he says. “ They’re an incredible
force. Whatever you’ve got on special,
they ’ll either match it or undercut it. ”
At the Mad Butcher’s Glenfield store on
a Saturday afternoon this month, prices
on a range of products were significantly
higher than at the hulking Pak ‘n Save
across the road.
For example, rump steak at the Mad
Butcher was $16.99/kg compared with
$11.49/kg at the supermarket; premium
mince was $15.99/kg versus $12.99/kg at
Pak ‘n Save.
Morton says it is not a fair price
comparison, given that it took place during
Pak ‘n Save’s “meat week”.
“That particular Pak ‘n Save has been
incredibly aggressive in its pricing,” he
We also visited the Glen Innes Mad
Butcher, where many products were
cheaper than at the nearby Pak ‘n Save.
Morton says the company believes the
Glenfield store is sustainable, despite three
former franchisees failing to make a go of
“ We’re not going to close it,” he says.
“ We’re not going to let the Pak ‘n Save
guy run us out of town.” Morton says the
Mad Butcher has begun a new initiative,
reducing “everyday meat prices” by 20 to
30%, rather than selective discounting that
puts more pressure on franchisees’ margins.
Countdown is making a similar play with
its “price lockdown” strategy.
More than 10 Mad Butcher outlets were
contacted to try to get a steer on how
existing store operators are faring, but
franchisees are forbidden from talking to
One current franchisee describes the
repercussions of talking to journalists as “a
fate worse than death”.
Another, who does not want to be
named, says things “seem to be going
alright” in his store.
“ Like any business, you have your ups
and downs,” he says. “ But as a group I
think we do a good job of competing with
the supermarkets. ” The conversation comes
to an end after the store owner receives
an e-mail from Mad Butcher head office,
warning franchisees that a journalist has
been contacting stores and reminding
them of the confidentiality clause in their
Asked if the franchisor seems a little
paranoid, the franchisee says: “I must
admit that I think that myself.” Defending
the restrictions, Morton says the company
needs to deliver a single, clear message to
“ To be honest, when these kinds of
stories come out it doesn’t hurt me, it
hurts the franchisees because people
sniff blood,” he says. “ Every Pak ‘n Save
operator thinks, ‘I’ve got them by the short
and curlies. I’ll wind up the screws, go
harder and try and put them under’. ”
Morton reckons consumers would face
higher meat prices if the Mad Butcher was
“ If we’re not there holding supermarkets
down at that level, what do you think
is going to happen to prices? From a
business story point of view it should be
about the goliath trying to squash the little
Veritas Investments is blaming
media coverage of Mad Butcher store
liquidations for its languishing stock price.
Acting chairman Tim Cook says
“negative publicity” around the
liquidations has been one of the main
contributing factors to the company ’s
share price slump.
Cook says the eight Mad Butcher
liquidations since late 2012 could be
used to paint a “dramatic” picture of
the business. But a range of factors
contributed, including health, landlord and
marital issues, as well as poorly performing
franchisees, he says.
“ I’m extremely disappointed with the
share price performance because it is not
driven off any good fundamentals. A lot of
the reason the share price has come back
has been stories in the NBR and that type
of thing. ”
Veritas said last month that it expected
underlying profit to rise by up to 28%
June 30, 2016. — New Zealand Herald
It is a well-known retail chain in the main centres, but for the Mad Butcher, these are
challenging times. CHRISTOPHER ADAMS of the New Zealand Herald investigates.
Michael Morton at the Mt Roskill
store in 2013, when Veritas bought the
The Mad Butcher story
PICTURES: New Zealand Herald
The Mad Butcher founder, Sir Peter Leitch.
Links Archive July 16th 2015 July 18th 2015 Navigation Previous Page Next Page