MBIE Investigating Frozen Fries Import Threat

The New Zealand potato industry are relieved that the Ministry for Business Innovation and Employment (MBIE) trade remedies team has now launched an investigation into the proven threat of surplus frozen fries being imported into New Zealand.
This MBIE decision was based on the positive evidence the New Zealand potato industry provided in their application completed in September this year, as part of the Potatoes New Zealand (PNZ) Pandemic Industry Recovery Plan.
The application was in response to the threat of increased dumped imports of surplus European frozen fries, to the NZ potato processing sector. The dumping and threat, combined with the effects of supply chain disruption caused by Covid-19, created an extraordinary situation that required investigation.
At the time of the application the surplus in Europe was 1.5M tonnes, today it is estimated at 2.6M tonnes and growing by the minute due to the impacts of further lockdowns in parts of Europe. 

This situation is not unique to the NZ potato industry. In recent months the US and Australia have also called for duties or actions to limit what they see as under-priced EU fry imports. The South African Vegetable Processors Forum, which includes Potato South Africa, McCain Foods South Africa and
Lamberts Bay Foods, wants to see the South African Government take anti-dumping measures against EU exports, echoing calls coming from Australia and New Zealand.
Other NZ industries may also be facing trade threats as a consequence of Covid-19 and PNZ has led the way in New Zealand, by quickly utilising the toolbox available through the World Trade Organsiation and MBIE.

The PNZ tariff application is available as a public file and contains non-confidential copies of the application, MBIE initiation report, copies of letters to notifiable parties and non-confidential copies of all future documents. The Gazette Notice notifying the initiation of the investigation is available on https://gazette.govt.nz/. The non-confidential application along with MBIE’s Initiation Report is available on: https://www.mbie.govt.nz/business-and-employment/business/trade-and-tariffs/trade-remedies/trade-remedy-investigations/.

NEXT STEPS:

• It may take up to 6 months for MBIE to investigate
• A 3 month public interest test to determine if the duties required are in the public interest post the investigation
• Belgian and Dutch embassies have been notified
• Foreign exporters have been notified
• NZ importers have been notified

BACKGROUND INFORMATION

Globally, the disruption of supply chains, and particularly sales to hospitality, by virtue of COVID-19 restrictions, has led to huge surpluses of frozen fries in major production centres, in particular the European Union (EU). This has led to extraordinary surplus in frozen potato chips and processing tubers in the EU.

The concern for the NZ industry remains that along with the existing domestic impact of the pandemic crisis, any profiteering activity from overseas exporters, will in turn cause further damage to the New Zealand potato-growing and potato-processing industries.

NZ Potato Industry Fast Facts:

• The NZ potato industry value is just over $1 billion dollars per annum
• NZ processed potatoes account for 55% of NZ potato industry value
• 85% of all fries eaten in NZ are NZ fries
• 15% of fries consumed in NZ are imported
• ½ NZ fries produced are exported = $100 million

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