Survey Shows I&PS's Are Here To Stay

UK - A survey of British Industrial & Provident Societies (I&PSs) from across the farming industry, shows that I&PSs still believe they provide relevant financial structures for the industry despite criticism that the day of the mutual has passed.
calendar icon 8 October 2009
clock icon 2 minute read

The research conducted by law firm Field Fisher Waterhouse LLP questioned I&PSs from across dairy, livestock and arable farming and shows that I&PSs do anticipate change reports FarmingUK .

In particular, I&PSs expressed the need for more cooperation in the supply chain and anticipate likely merger and acquisition activity amongst I&PSs over the next three years.

I&PSs have been operating in the farming industry for over 100 years. They provide a useful means by which those operating in a sector can pool resources, spread financial risk, benefit from economies of scale and compete with larger organisations.

Despite the difficult economic climate, two thirds of the societies surveyed believe that the number of I&PSs in the sector will remain the same over the next five years, with even a small minority (12.5 per cent) expecting that the economic uncertainty will make it easier for them to operate.

Even though I&PSs are confident that they are still relevant in today’s farming industry, many see potential for improvement. The vast majority of companies surveyed (84 per cent) are of the opinion that more can be done to improve efficiency within the supply chain. For many of the interviewees (82 per cent), the answer is cooperation at more than one level within the supply chain, to capture some of the added value which is created as food is processed within the supply chain.

Over half of those interviewed expect to engage in merger or acquisition opportunities either with other I&PSs or businesses that are not I&PSs. Only three per cent saw demutualisation as a possibility says FarmingUK.

David Wilkinson, Corporate Partner at Field Fisher Waterhouse LLP commented: "Even though I&PSs have been around for over 100 years, a striking majority of interviewees are certain that they are here to stay - although there may be some consolidation within the sector. They are stable organisations which do not engage in growth through the kind of corporate activities often seen with companies. The survey however shows the need for the sector to focus on efficiencies within the supply chain. This is something that we have a lot of experience of and recently advised Openfield on, when it entered into its groundbreaking arrangements with DHL."

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