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Warning Signs in Fonterra Deal

Rt Hon Winston Peters

New Zealand First Leader

29 AUGUST 2014

FONTERRA DEAL SIGNALS WARNING FOR FUTURE OF NZ DAIRYING

Fonterra’s new deal with a Chinese infant food maker signals New Zealand may be losing control of its dairying future, says New Zealand First Leader Rt Hon Winston Peters.
“Fonterra’s announcement of a joint venture with Beingmate two days ago was launched with the usual ballyhoo and unquestioned acclaim, but it has warning bells all over it,” he told a breakfast meeting of North Harbour Rotary today.

“Fonterra is doing the reverse of two large Chinese state companies, Mengniu-Yili (building a plant at Glenavy in South Canterbury) and Yashili (building a processing plant in Pokeno).

“The Chinese of course know what they are doing and for that they have my respect.

“Why doesn’t Fonterra add value to New Zealand raw material, create jobs in New Zealand, and establish New Zealand as the world-class centre for the development, production and marketing of world class Infant Formula to the world?

“Why are we allowing Chinese companies to enter New Zealand, mix/blend imported milk powder from their Chinese operations with New Zealand dairy powders and trade off Brand New Zealand back in China, claiming it’s made in New Zealand and is a product of New Zealand?

“Why are they using transfer pricing, and inter-company trading to undercut New Zealand-owned companies who are trying to trade and use the China-New Zealand Free Trade Agreement to our advantage, and opening the doors for Chinese companies to set up in New Zealand and use the FTA to China’s advantage.

“While Fonterra denied the China deal was linked to the botulism scare, the announcement came exactly a year after Fonterra and the government said the scare was a false alarm.”

Mr Peters pointed to the “worsening issue of sovereignty and market Brand New Zealand being determined by Chinese officials as to which industrial dairy plants they will recognise.

“In a few year’s time where dairying is concerned, it will not be in control of its own destiny.

“We will be developing raw-based material, sell it as a commodity at the lowest end of its value and be letting Chinese owned and controlled companies add value and earn valuable export earnings, which New Zealand companies should be earning.

“Where does NZTE, MFAT, and MPI stand while all this is going on?“

ENDS

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