'N.Z. scapegoat of U.K. butter trade’

Press, 31 May 1978, Page 7

'N.Z. scapegoat of U.K. butter trade’

NZPA London. British food traders are threatening to complain to the Common Market about what they see as New Zealand’s “unbeatable advantage” on the British butter market, according to the influential “Financial Times.” They are complaining about an alleged distortion of the market which has stifled competition from British and Continental dairies, Christopher Parkes wrote in an article in the newspaper. “The New Zealanders have stolen a march on their E.E.C. competitors,” he said. New Zealand’s Anchor brand of butter accounts for 40 per cent of sales in Britain and Parkes wrote that the reason is not hard to find: “Their butter is the cheapest in Europe.” New Zealand’s supplies of butter to Braitain are limited by the E.E.C, and are subject to a system of variable levies. Parkes quoted one “substantial dealer” as saying that the British Government gives Wellington advance warnings of likely changes in the levies so that importers could increase their stocks before levy charges rose. But a Dairv Board

spokesman rejected that charge. “We have periods when we have a price advantage and periods when we do not." he said. “Everybody needs a whipping boy. But the source of the butter trade’s frustrations lies in the absurdities of the Common Agricultural Policy not with us.” Earlier this month, New Zealand butter was available in Britain for about $2300 a tonne, England’s Country Life brand was about $2500. Kerrygold from Ireland was about $2 dearer, and Danish Lurpak butter cost about $2520 a tonne. “Dealers complain that the Government has effectively handed over control of the market to the New Zealanders and that the market is being distorted by their low prices,” Parkes wrote. But he said that New Zealand appeared to have been singled out as the butter trade’s scapegoat. “While the prominence of Anchor brand in the sales charts is a constant irritant to some E-E.C. suppliers, this is a particularly unfortunate moment for it to be so far ahead of all the competition. “Many traders are now suffering severely for blunders they made towards the end of last

year. They imported many thousands' of tonnes of butter before Britain’s accession to full membership of the E.E.C. brought a cut in import subsidies. “They believed that with plentiful ’cheap’ stocks to hand they could counter the effects of subsidy cuts and sundry other problems, and retain or even increase their shares of the lucrative British market. But they seemed to forget about New Zealand and apparently unde r-estimated the strength of the Government’s grip on food prices.” They are now paying for their oversight. Official figures put butter stocks at 178,000 tonnes, or six months supply. New Zeaand is still selling butter which arrived in Britain last year. Parkes noted that it is vital for the future of the trade for New Zealand to keep up its exports of butter to Britain and to sell its full quota each year if it is not to weaken its case for retaining access in the long-term future. New Zealand can export 125,000 tonnes of butter to Britain this year, 120,000 tonnes next year, and 115.000 tonnes in 1980. Quotas for beyond 1980 have yet to be negotiated.