Consumers to Subsidise Fisher & Paykel Shareholder
Import News from the Importers Institute
3 April 2001 - Consumers to Subsidise Fisher & Paykel Shareholders
The government is set to deliver a monopoly of the New Zealand whiteware market to Fisher & Paykel.
The Ministry of Economic Development imposed provisional anti-dumping duties ranging from 25% to 93% on Korean whiteware, at the request of the only local manufacturer.
As every bank manager knows, complaints of "unfair competition" are a sure sign of less than optimal management. In the six months to September last, Fisher & Paykel whiteware's revenue grew by 9.9 percent but margins reduced from 5.2 percent to 3.0 percent. The company attributed the bad performance to currency losses and "quite unrealistic price competition in Australia and New Zealand."
Fisher & Paykel bet on the NZ dollar going up last year. It lost. The company is now asking the government to come to its rescue. Consumers will, of course, bear the costs of reduced competition in the whiteware industry.
The idea that Korean manufacturers are "dumping" their whiteware at a loss for the benefit of New Zealanders is poppycock. The Ministry, however, will have no difficulty in establishing the need for "remedies," using the arcane definitions of our anti-dumping laws.
Importers and retailers of Korean whiteware are now facing substantial losses. As long as protectionist anti-dumping legislation remains in place, any importers who compete with local manufacturers can find their businesses destroyed overnight.
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