Aid offer unlikely to maintain 'Raro'

Press, 1 June 1977, Page 11

Aid offer unlikely to maintain 'Raro'

FROM CEDRIC MENTIPLAY IN RAROTONGA

A last-minute offer of aid by the New Zealand Government is unlikely to persuade W. Gregg and Company, Ltd, to keep its Rarotonga subsidiary, Island Foods, >-td running. Disappointed at the quantities of oranges and pineapples available for processing, the company has announced that it will close its plant on August 31.

An aid offer, amounting to a direct subsidy, is unlikely to change the company’s mind because it is not running at a loss. Apart from the hard commercial reasons for the withdrawal, Gregg has had trouble (one source called it “exasperation”) with the political environment in the Cook Islands.

' It is possible that the company’s decision was made as long as three years ago, contingent on certain possibilities which have not eventuated.

The only way in which the enterprise can be made more profitable is by increasmg deliveries to the factory. It is not generally known that oranges are not native to the Cooks, having been introduced from Jamaica by the New Zealand Island Territories Department nearly 30 years ago. Over the years, New Zealand has helped with the provision of fertilisers, sprays and expert assistance to improve the citrus crop. At present, New Zealand is spending $650,000 a year in the Cooks and a New Zealand orchardist, Mr C. M. Turner, is working there on a two-year term with a tropical maintenance and spraying expert, Mr M. J. Limmer.

The supply of fresh fruit has steadily stayed below expectations. In the

last eight years, orange production has fluctuated at just above 120,000 cases annually, with a high of 205,000 cases in 1973 and a low of 119,000 cases in 1976. At the same time, production of pineapples, mostly from the progressive island of Mangaia, climbed steeply but also erratically.

A report by Mr D. A. Shand, made in 1973 at the request of the New Zealand Government, suggested that the Cook Islands Government should guarantee higher production and that the company should pay more for its fruit.

As a result, the company paid about 6c a kilogram for its fresh fruit but the quantity provided did not increase significantly.

It was at this stage that the company suggested that any shortfalls should be met by the New Zealand Government. This was rejected on the grounds that such a procedure would amount to a subsidy. This was the situation when, last November, the company told the premier of the Cook Islands (Sir Albert Henry) of its decision to withdraw.

Perhaps a reason for the company setting August 31 as the date to quit was that several of the fruitprocessing machines being used in Rarotonga are not owned by Island Foods or by Gregg but are leased from a large Californian organisation, the Food Manufacturing Company.

These leases, it is understood, have to be renewed in July. Thus Island Foods can cut its losses by pulling out then and an incoming company will be faced with the immediate provision of funds for the new leases.

A side issue, but possibly an exacerbating one, has been the introduction by Gregg late last year of

synthetic-based “instant drinks,” including orange, grapefruit and pineapple, under the brand name “Raro” but having no connection with Rarotongan production. One of the main problems encountered by the company over the years has been the reluctance of the Cook Islands Government to show any interest in helping maintain the fruit supply.

Company officials . are bitter about this, even suggesting that Sir Albert’s Government could have helped, but “just couldn’t be bothered.” Recently, Island Foods seems to have been cutting back its operations. Although complaining about the lack of supply, it recently placed a limit of 1000 cases a week on Mangaian pineapples, with the rather surprising claim that it was unable to process more.

What will happen is not yet clear. Two senior representatives of InnesSchweppes recently visited Rarotonga at the request or the Cook Islands Government and are believed to be interested in taking over the operation. There have also been inquiries from the New Zealand Apple and Pear Marketing Board and from Fruit Distributors, Ltd, which already buys any fresh fruit not processed in the Cooks.

There is also the possibility that the Californian firm owning the machinery is interested. What emeges, however, is that unless the Cook Islands Government shows much more interest in its own internal affairs than it has done so far, the 30-year-old citrus replanting scheme, brought to actuality on New Zealand initiative and maintained largely by New Zealand taxpayers’ money, will be wasted.