Friday 16 August 2013

Fonterra have got it all sorted

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Last Thursday I went down to Wellington and got stuck behind a logging truck on the Rimutakas. On the way home, I got stuck behind a logging truck on the Rimutakas. Sounds a bit like Ground Hog Day only this was on the same day and on each occasion I was traveling in a different direction.

The worst trucks you can get behind are the logging trucks, particularly since statistics show that they have an alarming propensity to topple over, though as far as I am aware, this has never happened on the hill road. But the fact that you can encounter them daily going in both directions seems like a huge waste of resources somehow. The logs all look the same so why not leave them in their state of origin and do whatever needs doing to them in their own backyard, and save on the haulage?

It reminded of me of an address I heard some years back given by a wealthy Australian businessman. His vocation took him to all parts of the globe, but his most regular travel was between Wellington and Sydney. He told his audience that in his sojourns he noticed that every government in the world regularly gave its citizen the same piece of advice: they must export goods to increase the national wealth. Each government tells it’s populous that exporting is the panacea to all economic woes. Just as property developers say: “location, location, location,” so governments believe in the edict: “export, export, export.”

Our man never doubted that this was good counsel and one day in a Wellington hotel over breakfast he read in The Dominion that the NZ Dairy Board had announced what they considered to be an important breakthrough. According to the news item the Board was ecstatic that they were now exporting condensed milk to Australia. This development was something they had apparently been working on for years against stiff opposition from the Australian dairy industry.

The Dairy Board was the precursor to Fonterra. It was run by civil servant types on modest salaries who never forgot to keep their pipes clean.

When he flew home to Sydney he thought he would check the validity of the claims and visited the dairy section in his local supermarket. Sure enough, there on the shelves were cans of Nestles Highlander condensed milk. The brand name confused him a little because he understood Nestles was a Swiss company, but on the label it clearly said in modest letters: “Made in Auckland.”

But a few weeks later he saw a rather surprising news item in The Sydney Morning Herald. The Australian Dairy Industry announced that they were now exporting condensed milk to New Zealand. This was an important development, the newspaper said, because New Zealand was a major manufacturer of condensed milk and had vigorously fought off all foreign imports. On his next trip to Wellington our erstwhile businessman checked out a supermarket in that city and, as reported, there on the display stands were copious cans of Carnation condensed milk, proudly proclaiming: “Made in Australia.”

Try as he might the entertaining speaker failed to see just how this benefited our respective countries. He said that he had this enduring picture of two container ships, both loaded to the gunwales with condensed milk, passing in the Tasman Sea, heading for their hard fought markets. It occurred to him that to save thousands of litres of fuel they could stop midway and swap cargoes.

Further along this line of thought brought him to the conclusion that it might be easier to swap labels and simply re-label each others cans. Finally he decided the most prudent thing to do, and the greatest money saver of all, would be for them to leave the cans in their country of manufacture and airmail the labels.

Linking this story with the logging trucks going both ways over the Rimutakas may be tenuous, but you probably get my drift. Those trees felled in the Wairarapa are likely to be going to the port of Wellington to be exported, while trees chopped down on the other side of the great divide are coming over to processors in our neck of the woods or beyond. There’s a message here somewhere, which I’m sure is self evident and it will be exacerbated somewhat if a logging truck falls over on a carload of people.

But there’s a footnote. The Australian businessman’s speech was delivered at least twenty years ago. Today “Carnation” is a brand name owned by the Nestle Company just like “Highlander” and Nestles and Fonterra are in strict opposition to each other. I went looking for condensed milk in my local supermarket at the weekend. There were just two options: Highlander Condensed Milk, which is now made in Australia and the supermarket’s home brand, made in Singapore.

It seems that twenty years on we export contaminated whey powder for other countries to manufacture baby formula and import all our condensed milk.

I shouldn’t be the least bit surprised if one day I’m driving back from Wellington and get stuck behind a logging truck heading north with logs all stamped: “Made in China.”

“Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and no body to be kicked?”  - Baron Edward Thurlow                                                                  
 

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