Trans Tasman traffic changing direction

May 28, 2011

Bill English was criticised a few weeks ago for suggesting that lower wages here was a competitive advantage.

What do the critics say now that Heinz Watties is moving some of its production from Australia to New Zealand?

After an extensive review of the trans Tasman manufacturing footprint and capabilities, the decision has been made to consolidate production of sauces, beetroot, and some canned meal products from facilities Girgarre (Victoria), Brisbane and Wagga Wagga (NSW), to facilities in Hastings.

Heinz Wattie’s Chief Operating Officer Michael Gibson says Heinz operates a number of factories across Australia and New Zealand and share production between the two countries depending on how customers and consumers can be best served in both markets. The decision to consolidate manufacturing is a critical step in the plan to become more competitive in a challenging environment and to accelerate future growth.

It all comes down to costs of production:

Australia’s supply chain director, Mike Robinson, says the change is the result of a global productivity review, and is not a result of the strong Australian dollar.

“There is pressure on suppliers from customers and consumers. But there are a number of factors,” he said.

“The cost of raw materials, labour, energy. All of these have pressure on suppliers which mean that we have to maintain competitiveness.”

People are going west across the Tasman but if production moves east to New Zealand then people will follow.

Australia is rich in natural resources but it doesn’t have the plentiful supply of water which helps us produce electricity at a cheaper cost.

Having lower wages isn’t good in the long term but can be a factor which helps economic growth in the short term. As the economy grows, wages will increase .

Hat tip: Adolf at No Minister


Not another Chinese milk scandal

August 12, 2010

When I heard the news yesterday that hormones in milk might be behind the early sexual development of Chinese girls I feared the worst.

This was going to be a repeat of the Sanlu melamine poisoning scandal and once more Fonterra was implicated.

The company was quick to say:

Fonterra is a supplier of milk powder to Synutra International but we understand Synutra sources some milk locally and imports whey powder from Europe.

In New Zealand there are strict legislative controls on the use of Hormonal Growth Promotants (HGPs) – they are not allowed to be used on milking cows.

The strict controls mean that it is not necessary for New Zealand milk or milk products to be routinely tested.

Fonterra remains 100% confident about the quality of its products.

Thankfully our reputation for high standards of food safety mean when Fonterra says this.

Thankfully too,  Dunedin School of Medicine’s head of paediatrics Professor Barry Taylor says it’s unlikely milk powder is the cause.

“If there were three cases here in Otago I probably would not jump up and down. And certainly not if there were three cases in several many millions of people. There would be a natural number occurring, and I suspect, [if milk powder was the cause] there would be somewhat more than three,” Taylor told ONE News.

But false alarm or not, it is another reminder that the standards we adhere to in New Zealand are not those in all other countries.

Where Fonterra would almost certainly believed, the story of the cover-ups in the Sanlu scandal  show that it would be difficult to put the same level of trust in Chinese companies.

Adolf at No Minsiter says this is the reason we should prevent Chinese interests from buying up large chunks of our dairy industry.

I wouldn’t go that far but I do think it is essential that the integrity of our food production and processing is safeguarded whether it is foreign companies operating here or ours operating in other countries.

We can’t compete on price with countries like Brazil but we can compete on quality. Food safety is an important ingredient in our reputation for quality and we can not afford to have it compromised by people who don’t share our standards.


NZ a square peg in round ETS hole

November 24, 2009

New Zealand’s problem is that we’re different.

Primary production and industries based on it are our bigeest export earners; almost all our forestry is from exotic species; we have relatively little heavy industry and the bulk of our power is already from renewable sources.

The Kyoto Protocol wasn’t designed for countries like us.

The heavy reliance on primary production is much more common in developing countries. But around half our emissions come from animals and there is little, short of reducing stock numbers, we can do to reduce them immediately. Research is being undertaken to reduce emissions from livestock but practical, affordable solutions may be years away.

The rules requiring new trees to be replanted where old ones were felled was aimed at protecting rain forests and indigenous species. It seems no-one considered that a clause aimed at protecting indigenous trees shouldn’t apply to exotic timber species in a country where they grow as well as they do here.

Our private vehicle ownership is high by world standards but that reflects our relatively small, widespread population which means that public transport is neither practical nor affordable in many places.

New Zealand is a square peg and we were ill served by the negotiators who tried to fit us into the round ETS hole.

I have a lot of confidence in Tim Groser who will be working on our behalf at the Copenhagen summit.

But I thought the whole thing was a dog’s breakfast from the start and my concerns are even greater now that there are questions over manipulation of climate change data.

Over at Sciblogs Aimee Witcroft raises the possibility the leaked emails have been doctored and points to a Guardian story  on the issue. It quotes Prof Bob Watson, the chief scientific advisor at Britain’s Department for the Environment, Food and Rural Affairs who said,

“Evidence for climate change is irrefutable. The world’s leading scientists overwhelmingly agree what we’re experiencing is not down to natural variation.”

 Also at Sciblogs Gareth Renowden isn’t convinced by the leaked material.

For a contrary view see:  Ian Wishart,  Adolf at No Minister,  Roarprawn, Whaleoil,  Not PC, Poneke,  Mr Tips at NZ Conservative, Thoughts from 40 South, and Something Should Go Here  who says: 

I’ll say it a thousand times, climate change activism is about politics, not science.


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