Peters Speech: North Canterbury Federated Farmers AGM
Rt Hon Winston Peters
New Zealand First Leader
Member
of Parliament for Northland
7 APRIL 2017
North
Canterbury Federated Farmers AGM
Cheviot Trust Hotel,
Cheviot
April 7, 2017.
2pm-3pm
Farmers
– you are lions led by donkeys
Farmers are a
resilient lot.
There can be no doubt about that.
You
have had to be.
You have had droughts, earthquakes.
No
doubt you have too many problems that come from beyond the
farmgate: for example, issues with the Reserve Bank and the
overvalued New Zealand dollar.
And since yesterday with
the RMA legislation based on racial privilege – every time
you go for a planning consent you will not only have to get
the agreement of local government, you will have to get the
agreement of the local iwi.
Your resolve and
determination have been challenged – almost to breaking
point.
But you have endured and got on with it – in the
way the farming community does.
Driving here today we
travelled through Amberley and we passed that magnificent
statue outside the Hurunui District Council offices of
Charles Upham VC and Bar.
Like you he was a farmer from
these parts.
Looking at that statue some famous words
came to mind, not from Charlie Upham’s war.
But from
World War 1.
Those words were:
"Lions led by
donkeys."
This was an expression used to describe the
British infantry of World War I.
They were the
lions.
You know who the donkeys were - the generals who
led those soldiers.
We have the same thing here in New
Zealand with our farming community.
You are the
lions.
You do all the hard work, battling the elements,
the never ending turbulence of international markets – you
contribute massively to the wealth of this country.
And
you are being led by donkeys.
Worse than that – you are
also being led up the garden path.
And the hard thing to
understand is – you keep voting for these donkeys, time
and time again.
RED MEAT
Our red meat industry is
in crisis whether commentators realise it or not.
This
road is being led along the road of foreign ownership and
the main highway leads to China.
Did you not think it was
strangely coincidental that shortly after Shanghai Maling
obtained a controlling interest in Silver Fern Farms that
the chilled lamb market miraculously opened up in
China?
There might be a honeymoon period – but that
soon quickly goes and the harsh reality sets in.
There is
no “co-operative-private model” anywhere in the world
that has worked.
Co-operative ownership, that is the New
Zealand ownership component of this equation is going to be
corroded.
To this growing Chinese ownership add Oamaru
Meats, Prime Range Meats, Taranaki Abattoir, and Blue Sky is
on the international sale market as well.
Can you see an
emerging picture here?
We have a key export resource, red
meat, with all its added value potential, rapidly passing
into foreign ownership.
DAIRY
The dairy industry
is another classic example of a disaster happening.
Some
years ago, even before the Fonterra Botulism scandal of 2008
New Zealand First learned the Chinese had worked out New
Zealand politicians.
They worked out New Zealand
politicians would not twig to their long term game
plan.
People often why New Zealand First opposed the
China FTA in 2008 – the answer is because we respect the
Chinese, particularly their intelligence and long-range
planning.
It was not difficult to foresee in a growingly
resource hungry world what the Chinese would do.
We said
this was a bad deal for us.
We remember the cacophony of
criticism that came our way by the cheerleaders of
globalism.
These are the same cheerleaders who have no
idea of what is going on in our dairy and meat industries
but are so arrogant they argue that export volumes from NZ
are our exports, when it must be plain to any dairy or meat
and fibre farmer that they are NOT – that these exports
are China exporting from New Zealand to itself.
Do you
remember Fonterra’s subsidiary Sanlu back in March 2008
and the melamine poisoning that killed four children and
left thousands critically ill?
That situation was the
beginning of the end about much of our ownership of two key
prime industries.
Then to make matters worse, there was
the Fonterra Botulism scandal in August 2013.
Later that
month Fonterra claimed it was a false alarm.
Fonterra’s
PR spin fell on deaf ears and no Chinese newspaper and media
reported it.
The damage was already done.
And China
– excuse the pun - milked the situation for all it was
worth.
It was worth billions to them.
And billions of
LOST future revenues for New Zealand.
Their gain was our
loss.
What is the significance of this?
Well, in the
space of less than six years, under John Key and Bill
English, China got total control of our Infant Formula
industry – the biggest potential export earner that we
have ever had.
Fonterra’s response was a Slow Boat to
China.
Remember, China brought in new regulations and
rules that caused mass confusion.
While the confusion
tested the minds of MPI and MFAT and NZT&E, China had a
plan.
This was: Control the source and lines of
supply.
Under the guise of hygiene and quality they came
to control our Infant Formula processing plants.
One
party made countless statements against letting this
happen.
Most of the media refused to report
them.
China realised its own internal manufacturing
capabilities were lacking:
- Their farms and
technology were not efficient.
- Their herds were
inferior and milk production per hectare was poor.
-
And the quality of their milk was very poor as well.
Chinese consumers did not trust locally manufactured
brands of Infant Formula for their 20 million new born
babies each year.
These consumers were looking outside
China – to New Zealand.
The Labour government signed up
to the first free trade agreement that China had signed with
any developed country.
Soon after Australia signed a
better FTA with China.
And now we are trying to
renegotiate ours when the horse, to use a farming
expression, has well and truly bolted.
China obtained the
back-door key to New Zealand’s added value dairy
products.
They set up their own dairy facilities in New
Zealand.
They own, operate and control the supply chain
– from New Zealand, all the way to the baby’s
mouth.
A Chinese business friend said the Chinese would
import their own inferior milk powder from China, mix it
with New Zealand’s premier dairy powder and claim that it
was made in New Zealand.
He was right – that was
happening.
After the Fonterra Botulism scandal, NZ Infant
Formula’s reputation took a hit.
This allowed Infant
Formula makers in Europe to steal much of New Zealand’s
market share while the National government was boycotting
Russia.
History now shows, that the New Zealand
government and officials badly managed the crisis.
Their
ability to protect New Zealand’s reputation, the New
Zealand brand, was woeful.
After the Fonterra Botulism
crisis, over 90 percent of the small New Zealand owned and
operated Infant Formula businesses went to the
wall.
China is now in charge.
CHINA CREATES RULES
They created the rules and issued new regulations on
a regular basis.
Even MPI couldn’t translate them to
help the small innovative New Zealand businesses who got
sucked into this maelstrom of chaos.
Small innovative
Kiwi businesses became the collateral damage to the Fonterra
fiasco.
At the time John Key, then Prime Minister, was
being photo-shopped into advertisements and posters –
holding a can of Australian Infant Formula.
Now this
company is operating in New Zealand with their brand from
Australia called Cowala.
On April 15, 2016, the present
Prime Minister attended the manufacturing facility of GMP
Dairy Limited which is 51 percent owned by a Chinese
property company called Evergrand Dairy.
Mr English was
seen unwittingly endorsing the same company’s
product.
This Chinese owned company had already
manipulated our then Prime Minister John Key into a fake
advertising endorsement.
A headline on the front page of
the NZ Herald (September 2, 2012) read:
Baby Food
Fraud
20 Chinese firms caught lying about their Infant
Formula being kiwi-made.
SYNLAIT
Besides Evergrand, we have Synlait - a South Island
company that many New Zealanders think is New Zealand
owned.
They’re wrong.
Bright Dairy China’s third
largest dairy company by volume, got control of Synlait back
in 2010.
It owns 210 farms in China and sources milk from
another 500.
It owns over 20 processing
factories.
Synlait’s Infant Formula goes to China.
YASHILI
Then in January 2013 Yashili
International Holdings, a Chinese Infant Formula company,
announced plans to build a processing plant in New Zealand,
its first major offshore investment.
In August 2013
China’s largest producer of liquid milk products, the
Mengniu Group Yashili acquired a controlling interest in
Yashili and Danone, a French company having a minority
interest.
Why is Danone important?
This is the same
company suing Fonterra for the Botulism fiasco where they
lost $597 million of sales because of the scare.
Yashili
entered NZ and built a plant at Pokeno with a production
capacity of 52,000MT (metric tons) of premium quality Infant
Formula product.
They don’t sell any of it to New
Zealand consumers.
YILI/OCEANIA DAIRY
Then we
have Yili, China’s largest dairy company which
commissioned a $236 million milk processing plant just north
of the Waitaki River in 2014 and called it Oceania
Dairy.
They have announced a $400 million expansion to
include an Infant Formula canning line.
CHINA ANIMAL
HUSBANDRY GROUP
Next, we have China Animal Husbandry
Group.
Last year this Chinese company bought a 71.8
percent stake in Mataura Valley Milk.
They are building a
new plant which will manufacture Infant Formula, ultra-high
temperature (UHT) cream and a small amount of skim milk
powder.
About 50 per cent of what the plant produces will
be going to China.
China Animal Husbandry Group (CAHB)
president and Mataura Valley Milk Chairman Xue Tingwu said
the Infant Formula market was expected to increase by 80 per
cent during the next 10 years.
And guess who is going to
get the added value of our milk on that one?
FONTERRA
Which brings us to Fonterra, New Zealand’s
biggest company.
And the question - too big to fail, or
is it?
When Fonterra paid $755 million for a stake in
Beingmate, allegedly one of the leading Infant Formula
manufacturers in China, the NBR reported Fonterra
saying:
“It was confident, it was good
value.”
Fonterra’s track record with international
business decisions is not a good one.
Fonterra’s
relationship with Beingmate has been the subject of PR
camouflage.
Beingmate has suffered two consecutive years
of revenue decline.
Fonterra has signed an exclusive
deal, making Beingmate Fonterra’s exclusive Anmum
distributor in China.
Market sources say Anmum would be
lucky if it sold 15,000MT (metric tons) of Anmum in China in
2016.
And what is the value of Fonterra’s investment in
Beingmate today?
$523.3 million, or a bath or haircut of
over $231 million in just two years.
And Beingmate’s
performance selling Fonterra’s Anmum product is appalling
because Synlait with China’s Bright Dairy as shareholder,
is now NZ’s largest manufacturer of finished Infant
Formula.
Synlait accounts for 30 percent of NZ’s total
export volume of Infant Formula in 2016.
So to give a
summary:
In six years Fonterra has gone from –
-
NZ’s largest company, the world’s biggest exporter of
dairy powder
- A company with all the resources to
manufacture a world class Infant Formula, the greatest
export product we had.
- A company that could add value,
and add incremental revenue to their farmers’ base dairy
powder by making the world’s premium, safe and trusted
Infant Formula brand.
- A company that could have helped
smaller NZ companies dominate the China market.
From
this to a company that just went on missing the boat!
In
fact last year one of its leading lights “it’s time we
got into some added value.”
Hallelujah!
The horse is
out of the stable and down in the next county and they are
waking up.
New Zealand First supports free trade.
But
only when it is free trade when it works for us.
We say
handing over dominating control to Beijing or anywhere else
overseas, is economic madness.
New Zealand First was the
first to predict Brexit and the need for a New Zealand-Uk
Free Trade Agreement.
We said that six months before the
referendum to British newspapers.
We were the first to
call for a CER style Closer Commonwealth Economic Relations
starting with NZ, Australia, the UK and Singapore.
We
have also backed a NZ-Russia FTA – since Russia is the
world’s number two dairy and beef importer.
We believe
in economic nationalism and supporting our farmers.
But
we do not believe in handling over our wealth, our assets,
our resources to foreigners.
And what’s bright about
bright.
Well, Bright Dairy controls Synlait. And Bright
Food has got control of Silver Ferns Farms.
Anyone
joining the dots here now?
CONCLUSION
It is now
plainly obvious that consecutive ministers have failed New
Zealand, failed our farmers and failed small innovative
businesses.
They have allowed, under the back door key
policy, several large Chinese companies to enter New Zealand
by stealth.
The Chinese are taking the cream out of New
Zealand.
New Zealanders are becoming the workers –
serfs in our own country.
Fonterra had a head start on
any NZ Infant Formula exporter to China.
It squandered
that lead.
They are well back in the pack now, if not
last.
According to market intelligence reports, Beingmate
and Fonterra have also not engaged with the ever-changing
world of e-commerce or digital marketing in
China.
Unbelievable!
This is New Zealand’s biggest
company abdicating its responsibility while it destroyed
several innovative, small, entrepreneurial NZ companies
trying to enter the China market on the back of our free
trade agreement.
You know why it’s called Free
Trade?
Free for me, none for Kiwi.
What was that
mentioned at the start of this speech?
Lions led by
donkeys.
So why would you keep voting for them?
ENDS