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Speech: Luxton - Starch NZ Relaunch

ADDRESS BY HON JOHN LUXTON

Starch New Zealand Company Relaunch

Waipuna Hotel, Auckland 13 July 1999 (check against delivery)

Rob Lowndes, General Manager Starch NZ Dominic Regan, Sales Manager Ladies and gentleman, invited guests.

It's a pleasure to be here for the relaunch of your company - Starch New Zealand. As many here today will attest, Starch New Zealand's products are key ingredients used by many of New Zealand's leading companies.

I understand that in addition to the name change, Starch New Zealand is also undergoing substantial change. In its management structure, in sales and marketing, and in control systems and processes.

Tomorrow's foods are going to continue to change and new developments in the food industry offer some really exciting opportunities. I commend your company's responsiveness to the changing needs of the market.

Food, like most other products in today's society, is increasingly affected by the globalisation of markets and the inability of governments to any longer exercise direct control over the flow of capital, people with skills, and technology across national borders. In the US for example, online grocery shopping was worth $100 million in 1997 and is expected to reach $57 billion by 2007.

You can look at these things pessimistically as many do when faced with change. Or, you can look at it in an optimistic way - of New Zealand providing the highest quality foodstuffs to world markets and responding in the same way we do with products in any other market. With innovation, speed and ever improving quality.

Your decision to relaunch and rename your company clearly shows your commitment to meeting the challenges of the future.

Just last week I read an article that mentioned butyric acid (derived from starch), has a strong claim to reducing bowel cancer. The article said that Australians eat half as much starch as they should, and that Australia has one of the highest colo-rectal cancer rates in the world.

Should further research prove this link, then clearly there is potential for innovation in your industry. For example the use of high amylose starches (which favour the production of butyric acid in the colon) in food such as muffins, breakfast cereals, breads and a whole range of other products.

Strategies to raise the contribution of starch in the diet and reduce bowel cancer would be of enormous public health benefit.

Starch New Zealand has already been recognised as an innovator as your 1995 Food Industry Innovation Award for the commercial release of Hi-Maize demonstrates. Hi-Maize is rich in resistant starch (ie. starch that breaks down in the large bowel) and is a natural source of dietary fibre that can be added to a wide range of foods.

The success of Hi-Maize has been reflected in increased demand for maize cropping, active nutritional and analytical research on starch, increased exports and stimulation of innovative product development.

For New Zealand's food producers, innovation is the key to the future. Getting new ideas into a marketable product is fundamental. If we look at our supermarket shelves we see a change in products on a weekly basis. Take the cereal world for example where the market continues to change and evolve on the basis of consumer taste and demand.

Flavour, functionality, nutrition and fashion, all play a part in today's consumer demands. Other trends include the willingness to pay a premium for perceived value, more flavour being needed for older jaded tastebuds, and a growing market for convenience foods and home replacement meals.

For food producers such as yourselves who create the opportunities, who get involved with change, who recognise the consumers' wants, the future is very bright.

Food Safety

Of course fundamental to meeting market demand is responding to consumer concerns about food safety.

The Government is very concerned about ensuring food safety in today's environment. Given the problems of BSE in the United Kingdom, dioxin scares in Belgium and microbiological food poisoning outbreaks in the United States, it is important to have a robust food safety regime which this country already has.

The responsibility of Government in assuring food safety is to set the framework within which businesses operate, rather than acting as the quality controller through methods such as on line inspection.

This approach to food safety regulation reduces the need for direct intervention, and places the responsibility for systems management with industry.

Likewise distributors and retailers have to store and handle food properly. So do restaurants. And so do consumers, in their homes. Internationally we are seeing further pressure for evidence of compliance with standards and such standards are increasingly being set at higher levels.

Government cannot maintain the regulatory framework alone. All the players need to work in partnership. But Government must provide basic legislation, sensible standards, monitoring and evaluation and guidelines to manage the risks inherent in food production.

The provision of useful information to consumers and other users of products has become a vital factor in ensuring products are marketable. For manufacturers and retailers to be able to satisfy the demands made on them, primary producers must be able to assure them that the raw ingredients they purchase met their specifications.

For example the origin of certain products, their genetic makeup, and the production methods used including pest and disease control methods, have all become issues that many end users want assurance about. Which brings me to the subject of genetically modified food.

GMFs

GMFs are very much the cause celebre at the moment.

Yet you would think from certain politicians and media commentators that we've only just stumbled on to the issue. Nothing could be further from the truth. New Zealand enjoys some of the world's most up to date legislation in this area with the Hazardous Substances and New Organisms Act.

To be blunt; if we didn't have HaSNO and ERMA, the Environmental Risk Management Authority, there's a good chance New Zealand's scientists would have been facing an extending moratorium.

We badly need a debate on genetic modification, but it should be properly informed; and both sides must have a fair chance to be heard. To date the debate has been fairly one sided. The claims of the alarmists have been allowed to unsettle many with little or no scientific basis.

New Zealand is a world leader in some aspects of biotechnology research and should hope to remain so. Genetic modification is one small area of biotechnology, offering both opportunity and risk to the food sector. Food producers need to learn how to use the opportunities, without endangering the trust and faith of consumers in the process or the foods produced.

It is clear that consumers want choice, and to be treated with respect. Consumers want to know what they are eating which is where labelling comes in. That is why the Government supports a system that is practical, affordable and meaningful. We need to ensure that any labelling system is consistent, sensible, workable and meets our international obligations and our consumers' needs.

As managers of leading New Zealand companies, many of you here this morning have an opportunity - and I believe, an obligation - to engage in the debate. We need to agree on the level of protection or safety we require in order to capture the benefits science will offer in the future. This requires an openness, a preparedness to listen and to educate, and a willingness to challenge misinformation. You are well placed to contribute to this.

Single Food Agency

Finally I would like briefly to mention the new single food assurance authority.

Aspects of food administration have been under scrutiny for a number of years and over that time significant changes have occurred. The move towards a risk management based approach to food regulation has been one of the more significant.

On 1 July the Government announced the decision to proceed with a single stand alone food assurance authority. Although originally we had hoped to site it within MAF, the political process being what it is, this option became increasingly difficult to progress.

At present expertise in food safety is spread across MAF and the Ministry of Health and is divided largely along domestic and export lines. A single agency will have no such division. Its focus will be to ensure that consumers both in New Zealand and in our overseas markets are presented with safe food.

Exactly what form the new agency will take is still being worked through, but can I say that contrary to what some have been speculating, this does not automatically mean the "gutting" of MAF. Whether or not biosecurity is separated from food assurance remains to be seen. Obviously I would be interested in industry's views on the matter.

There is little doubt that larger businesses and in particular export businesses will benefit by having one regulatory agency responsible for administering all food legislation and in turn having that legislation based on the same paradigm - risk-based management.

I would like to conclude by thanking you for the invitation to speak here this morning and I wish Starch New Zealand every success for the future.

From my perspective, the future for the New Zealand food industry is very exciting.

ENDS

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