An Australian snub over New Zealand fresh produce is being labelled by Labour as a breach of the decades old Closer Economic Relations agreement.
Prime Minister John Key plans to raise the standoff with his Australian counterpart, Tony Abbott, in Sydney tomorrow and labelled it an "irritant" in the trans-Tasman relationship.
Legal advice has been flying since the big two Aussie supermarkets, Coles and Woolworths, announced an aggressive Buy Australia campaign which has seen some New Zealand exporters have their goods removed from shelves.
Hardest hit is Talleys, which had previously been contracted to supply goods under the supermarkets home-brands labels.
Talleys is understood to have lodged a complaint with Australia’s competition authorities, and has lobbied the Government to lodge a formal objection under CER.
Key said today he would be making sure Abbott was aware of the issue but the Australian prime minister’s hands may be tied.
“The two big supermarkets in Australia, [which] control about 80 per cent of the distribution to Australian consumers, are stopping those New Zealand products in their home brands, so its in their plain package brand. It’s not every product that’s coming off the shelf but it’s in that area...so that’s certainly an irritant and it’s an issue actually for some of these companies.
“We want to make sure Mr Abbott’s aware of it, and we’ll be working over time to see whether that’s a breach of CER or not.”
Labour MP Phil Goff yesterday labelled the action a breach of CER and said Key should ditch his usual “deferential” approach to Australia and assert the rights of Kiwi exporters.
But Key said the legal advice on CER was not clear cut, even if the actions of the supermarkets might breach the spirit of CER.
- © Fairfax NZ News