Latest / Best of Business / David Hadfield: Process Vegetables NZ chairman on McCain closing its Hastings processing plant

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David Hadfield: Process Vegetables NZ chairman on McCain closing its Hastings processing plant · Best of Business

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  Speaker 2: Unfortunately, it's another blow for vegetable growers today. McCain, the
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  Speaker 2: world's largest manufacturer of frozen food, is closing its vegetable
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  Speaker 2: processing plant and Hastings. Company won't say how many jobs
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  Speaker 2: are affected, but it does employ about twelve hundred people
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  Speaker 2: in New Zealand and Australia process vegetables in z Chairman
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  Speaker 2: David Hadfielders with us. Hi, David, Hello, David, did you
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  Speaker 2: know this was coming or was this a shock to you?
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  Speaker 3: A shock? Yes, definitely. But we suspected round our board
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  Speaker 3: table that once one week the others might follow soap.
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  Speaker 2: Who are the others? So there's waters.
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  Speaker 3: There's pain and Tally's.
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  Speaker 2: Is Tally's going to do something similar?
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  Speaker 3: I don't think so. They're not as big and more
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  Speaker 3: targeted than what they do. They are also across potatoes
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  Speaker 3: as well, famous McCain, but all out of their brand
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  Speaker 3: new Ashburton factory and they're a New Zealand company.
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  Speaker 2: So do you think that we can say this is
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  Speaker 2: the end of the bad news for the vegetable grows
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  Speaker 2: I would hope.
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  Speaker 3: So there's not much left of the industry. That the
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  Speaker 3: loss of mccains is about twenty one percent of the
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  Speaker 3: industry and the loss of what he is was about
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  Speaker 3: thirty percent of the industry. So that's more than just
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  Speaker 3: over half the industry gone.
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  Speaker 2: Yeah, it really does some grim, doesn't it. Now since
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  Speaker 2: you found out, which is a couple of hours ago,
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  Speaker 2: you've been talking to vegetable grows and what have they
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  Speaker 2: been telling you?
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  Speaker 3: None of them knew anything was happening. Was shocked through them.
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  Speaker 3: One of them I spoke to was a very large
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  Speaker 3: graph for McCain's and it was news to him. So
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  Speaker 3: they didn't let anybody know that this was happening.
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  Speaker 2: What do these growers do? Do they do they have
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  Speaker 2: the option of dairy conversion?
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  Speaker 3: Well, Hawks Bay guys probably don't to the same extent
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  Speaker 3: as the Canterbury guys do, but basically that's what's happening
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  Speaker 3: in Canterbury. You're either cell your land for subdivision or
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  Speaker 3: you convert to a dairy farm. And ironically I was
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  Speaker 3: on a subdivision. We have got the news.
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  Speaker 2: What happens if you're in Hastings or yeah, in Hawk's Bay.
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  Speaker 2: What are your options.
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  Speaker 3: Growing more wearable crops or livestock really or you or
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  Speaker 3: you put apples or kiwi fruit or wine and wine.
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  Speaker 3: As I understand it isn't that great at the moment,
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  Speaker 3: but yeah, apples or kiwi fruit.
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  Speaker 2: Yeah, And either way you're facing a massive cost down
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  Speaker 2: to you. What does this do to the cost on
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  Speaker 2: the shelves that we're paying for. I mean, not that
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  Speaker 2: this is your primary concern, but what happens to the
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  Speaker 2: cost of frozen stuff on the shelves.
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  Speaker 3: Well, there's all the important stuff that's coming in and
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  Speaker 3: you know that's coming from countries with subsidies or you know,
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  Speaker 3: you don't know the quality. At least New Zealand food
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  Speaker 3: has a set quality standard that we have to meet
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  Speaker 3: and we're ordered to do on. So we've been some
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  Speaker 3: of the best producers in the world and we're having
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  Speaker 3: the rug pulled out from under us. And I don't
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  Speaker 3: entirely blame the processes either. I've seen some of their margins.
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  Speaker 3: They don't make a lot more than the grower. The
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  Speaker 3: money is made further down the track. And with all
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  Speaker 3: this imported stuff and the New Zealand producers getting squeezed
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  Speaker 3: out of freezer space for the home brand and imported product.
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  Speaker 3: And you've got to look at rest homes and hospitals, etc.
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  Speaker 3: Who use large volumes of processed vegetables frozen vegetables. Those
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  Speaker 3: markets have dried up for the local companies and cost
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  Speaker 3: productions very high.
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  Speaker 2: Do you think we just need to accept that this
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  Speaker 2: is what is going on in New Zealand now, that
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  Speaker 2: we just are not able to compete with the cheapest
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  Speaker 2: countries in the world for making food and products, like we.
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  Speaker 3: Can't come pete with them, and we can't compete with
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  Speaker 3: countries or subsidies that New Zealand has to think about
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  Speaker 3: food security. Just you know what happens if we have
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  Speaker 3: a spat with China. That's the end of the dairy industry, don't.
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  Speaker 2: We If we have a spat with well, food security
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  Speaker 2: and economic income are different things, right, If we have
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  Speaker 2: a spat with China, we're just gonna have a lot
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  Speaker 2: of milk that we're going to have to drink. But
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  Speaker 2: what do we do? I mean, even if we don't
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  Speaker 2: have the frozen production here, we still have the fresh stuff. Right,
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  Speaker 2: We're actually probably got sufficient to live off.
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  Speaker 3: We're getting important to fresh vegetables as well. Coming in,
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  Speaker 3: so that's driving out local production and housing is encroaching
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  Speaker 3: on a lot of the good growing land. So and
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  Speaker 3: I do not blame the people who own the land
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  Speaker 3: for selling us to a developers their land. They can
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  Speaker 3: do what they like with it, but at a higher
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  Speaker 3: government level it is causing quite a problem that the
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  Speaker 3: good productive land is being gribbled up for.
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  Speaker 2: Other Yosh, I'm actually glad you raised that because I
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  Speaker 2: did want to say something about that. David. Thank you.
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  Speaker 2: David Hadfield Process Vegetables and Zin.
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