Wattie's sees red over cheap imports
Food giant alleges tomatoes being dumped but shoppers welcome relief from rising food prices
An investigation is under way into allegations by Heinz Wattie's that Italian preserved tomatoes have been dumped on the market here, causing "material injury" to the New Zealand food industry.
Heinz Wattie's has provided evidence, which the Ministry of Economic Development believes is credible, that the New Zealand industry's prices have been undercut by tomatoes dumped here for less than what they would fetch in their local market.
Imports from Italy rose sharply in the year to the end of April, from 8739 tonnes to 10,687 tonnes, despite no corresponding spike in demand. Heinz Wattie's alleges that Italian producers have so much spare capacity that they can supply New Zealand importers at short notice.
As a result, Italian products now represent 84% of tomato imports compared to 80% the previous year.
Customs data shows 58 companies were importing them, but much of the financial data information in the ministry's initial report is blacked out.
Heinz Wattie's alleges the normal local Italian market "ex factory" price per kilogram of processed tomatoes is 1.27, but the New Zealand price is about 67 euro cents.
Those figures have led the ministry to conclude that there is sufficient evidence to justify an investigation. Depending on the outcome of that, New Zealand could be justified in taking "counter measures".
Following the ministry's initial report, a formal investigation began on September 19 and a final determination is due by April 8 next year, but the authorities could take emergency anti-dumping measures earlier to prevent damage to the local industry. The earliest such measures could be imposed, though, is mid-November.
Heinz Wattie's told the Sunday Star-Times that it believes dumping is continuing unabated despite its complaint and the ministry's initial finding.
The company, which sells tomatoes under the Oak and Wattie's brands, says the alleged dumping has had a big impact on its business, although local growers are yet to feel the effects.
The initial report says: "Heinz Wattie's stated that the imported price of preserved tomatoes from Italy has decreased significantly in 2011 and competitors have passed these savings on to consumers, which has meant that Heinz Wattie's forecast increase in sales did not eventuate."
The company told the Sunday Star-Times: "In this current context our only interest would be in maintaining as far as possible a level playing field."
Although Heinz Wattie's is hurting, consumers have welcomed the cheap imports at a time when the cost of food is rising. Price drops have resulted in shoppers switching to value-added tinned tomato products including herbs and other ingredients.
New Zealand growers and packers are not the only businesses affected. Imports from the two other largest producers supplying New Zealand – Turkey and Australia – have declined.
However, Australian tomatoes were also being imported at prices "significantly undercutting" Heinz Wattie's, but the ministry determined that this was not on a scale that would damage the company's business.
This is not the first time Heinz Wattie's has made allegations of dumping. In 2006, following an increase in peach imports from China and Spain, a complaint from Wattie's led to "anti-dumping penalties" being imposed on importers.
- © Fairfax NZ News
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