Air NZ looking east?


Asia is the flavour of the moment as New Zealand moves from traditional markets and destinations for trade and tourism.

It’s called the east but that’s from a European perspective, Asia is really to our west unless you go the long way round the world.

The nearest major land block to our east is South America and there are also opportunities for business and holidays there too.

Fonterra is already involved in dairy farming in Chile.

PGG Wrightson’s investment in Uruguay wasn’t successful but that doesn’t mean there aren’t still opportunities there and in other parts of South America.

One of the obstacles is the shortage of flights and I hope speculation that Air New Zealand is exploring markets in South America is true.

It would add a much-needed additional option for would-be travellers.

Only Lan Chile and Aerolineas Argentina fly direct between Auckland and South America – to and from Santiago and Buenos Aires respectively.

You have to fly to Sydney to go with Qantas. Emirates has recently entered the South American market but you not only have to take the long way via Dubai you have to stay there for at least a night.

The only options with Star Alliance partners are with indirect and much longer routes via the United States or Europe.

The World Cup brought more tourists here from Argentina. Now that the tri-nations competition has been expanded to include the Pumas in what will be the Rugby Championship,  there will be more interest from people wanting to come here and go there. That will lead to an increase in interest in Argentina and further afield in South America with the potential for more tourism and trade opportunities.

We’ve been to Argentina five times. It’s an amazing country and in spite of the cultural and language differences we’ve found the people are like us in many ways.

Visiting there would be even better if we could fly with Air New Zealand.

Fonterra learning the hard way


Fonterra has learned a very expensive lesson in China, one of which is about trust in a culture where corruption is rife and saving face comes before safety.

As chief executive Andrew Ferrier said, the company will never know  if it was mis-led by officials over the poisoned milk scandal.

Defending Fonterra against claims that it should have gone public earlier, Mr Ferrier said the company thought government officials at all levels were aware of the problem in August. “When our people in China met with the New Zealand embassy we thought the Chinese central government was aware.

“It could have been that people were fooling us at the local government level. We’ll never know.”

A senior Chinese government official is now saying that the problem is under control. But can we believe that?

This will not be the end of Fonterra’s investment in China but as company chair Henry van der Hayden says:

“The lesson for us here is about having absolute control over our supply chain,” Mr van der Heyden said. “We have to make certain that we learn from this.”

That is what they do in New Zealand and our reputation for safe milk on which consumers rely is built on that. That is what must happen in other countries and with other ocmpanies. PGG Wrightson which has dairy investments in Uruguay and Silver Fern Farms and Alliance Group which are talking about sourcing lambs from South America, must be equally rigorous.

 Macdoctor  says:

Future investors must learn Fonterra’s lesson well. When you are dealing with an authoritarian society where face-saving is the norm, you must expect that mistakes and bad news will always be covered up. This is not to say that the Chinese are dishonest, far from it, they just have away of handling failure that confuses us. The type of transparency that you see in New Zealand, where even the Leader of the Opposition fronts up and apologises, is one that is unique to the West. Trade with China is certainly possible. Participation in joint ventures will require some work on both of our parts.

When Ferrier was interviewd on Wednesday he said that he didn’t think it would be possible for the San Lu brand to recover. Inquiring Mind reports here  and here that San Lu is close to bankruptcy and that Sanyuan Foods which wasn’t hit by the poisoned milk is likely to acquire it.

In a related story experts are struggling to work out safe levels of melamine in food in New Zealand.

Danger in branding their meat like ours


Alliance Group might buy lamb from South America to fill orders it can’t meet from New Zealand.

Chief executive Grant Cuff said with sheep numbers declining around the world, the Invercargill co-operative was looking at supplying North American and European markets with South American lamb.

Alliance considered a similar possibility about a decade ago, but Cuff said the situation had changed.

At the time South American lambs were lighter in weight, there were insufficient numbers and issues with disease and traceability.

South American farmers had improved the quality of lambs and addressed the disease and animal traceability issues which, together with falling sheep numbers, had encouraged Alliance to revisit the idea.

“New Zealand has looked at it before. It is all a matter of timing and priorities and we think the moment is right to have another look.”

Cuff said Alliance was still to decide if the lamb would be sold under its own brands, but initially that was unlikely.



Guaranteeing continuous supply may be necessary to satisfy export markets and if that can’t be done with our own lamb, meat companies will have to look elsewhere.

I have no concern about the quality of meat from South America. I’ve enjoyed several meals of lamb in Argentina and the meat was at least equal to the best I have eaten here, although that was due in part to the way it was cooked – on an asado .

However, there is a danger in branding their meat like ours because foot and mouth disease is a recurring problem in South America.

Keeping separate brands will ensure there is no risk to our exports by association with theirs if or when there is another outbreak of the disease there.

%d bloggers like this: