For decades Kiwis have lamented about not getting into higher end manufacturing and branding of market leading products. Its even blamed for our low productivity. The old joke is that we export logs to China and they send them back to us, but in the form of card-board and wooden boxes full of imports, where the price they charge us for the boxes is five times what we charged them for the logs.
Sir Paul Callaghan even wrote a whole book about it, called, "Get off the Grass: Kickstarting NZ's Innovation Economy". He was a NZ physicist, founding director of the MacDiarmid Institute for Advanced Materials & Nanotechnology at Victoria University, a Professor of Physical Sciences & President of the International Society of Magnetic Resonance. The government's Callaghan Innovation was named after him.
Now Fonterra is determined to get NZ back into the grass. The dairy giant has confirmed plans to sell its consumer arm, including brands like Anchor, Mainland Cheese, and Kapiti Ice Cream. It could be a trade sale, whereby a foreign company buys the products & brands. For Fonterra not to be able to make a success out of such brands, in a world desperate for organic, free range, environmentally products, which many folks do associate with NZ, is a national disgrace. To be clear, its looking like it won't be long before the symbolic heart of our nation - the "Mainland" - the South Island - will cease to exist in the sense our iconic Mainland Cheese will become Mainland China. Aside from its interest in these products, some have touted Nestle of Switzerland as a buyer. What's that saying? That the Swiss can do high end and the Kiwis stay in the grass and do low end, because the Fonterra Execs don't know how to do high end? Sir Paul Callaghan would be horrified at their ineptitude.
Now Fonterra is determined to get NZ back into the grass. The dairy giant has confirmed plans to sell its consumer arm, including brands like Anchor, Mainland Cheese, and Kapiti Ice Cream. It could be a trade sale, whereby a foreign company buys the products & brands. For Fonterra not to be able to make a success out of such brands, in a world desperate for organic, free range, environmentally products, which many folks do associate with NZ, is a national disgrace. To be clear, its looking like it won't be long before the symbolic heart of our nation - the "Mainland" - the South Island - will cease to exist in the sense our iconic Mainland Cheese will become Mainland China. Aside from its interest in these products, some have touted Nestle of Switzerland as a buyer. What's that saying? That the Swiss can do high end and the Kiwis stay in the grass and do low end, because the Fonterra Execs don't know how to do high end? Sir Paul Callaghan would be horrified at their ineptitude.
Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.
9 comments:
Look at the fineprint on the back of your "Mexican" Corona beer..... Made in China!
All pretty embarrassing for the 'good ol' number 8 wire kiwi -' etc. we used to have more sense - of self-respect - before we were bullied into the 'climate change' exaggeration and all the rest. Serves us right - all of us who didn't stop the rot.
...And we wonder why young New Zealanders are leaving the country in record numbers, almost 2000 a day in September. We replaced Languid Labour with Negative National last year, both of which are past their "use-by date"!
Kevan
In the 70’s there was a huge political storm over plans by Fonterra’s predecessor company to sell out to multi-national Kraft.
A campaign spearheaded by the Dairy Workers Union was successful in preventing that catastrophe.
Now it appears Fonterra is determined not to learn from history.
It is sad that the huge potential to add value to what New Zealand produces is being ignored.
Why can’t Fonterra make a profitable success of building global brands? Is it due to short-sighted management and governance? Or has the key marketing nous already departed NZ along with others with globally valuable skills?
Will the government block this move as a previous government stopped Kraft - or will NZ become a price taker for commodities instead of a price maker with market-leading brands?
It's all about the money. Would be interesting to know what the farmers think of the idea, Probably screwed by their own company AGAIN.
It's typical of NZ, short term gain for long term loss.
Think power generators, line companies, power retailers.
Aliance Freezing company cooperative have over one year seriously ruined the company with a disasterous balance sheet and overspending or incompetence . Silver Fern Farms have corporately stated that they would entertain a joint venture with the farmer owned Alliance. Yeah Right . China snapped up a destitute Silver Fern Farms only a season or two previously.
New Zealand - No Can Do!
Silver Fern Farms were NOT destitute. That partial sale was engineered and forced through under Key with his poxy Wall St mates Goldman Sachs as brokers. Dirty As.
Before making the product, first have a market to sell in to. NZ can’t sell into-foreign markets our over priced goods because we are a high input low productivity country
The maths don’t work
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