'Vested interests’ in trade

Press, 29 March 1980, Page 12

'Vested interests’ in trade

Vested interests are preventing New Zealand from fully developing ’her trade potential, according to a Christchurch marketing export. Mr Mellon, after IS vears as a .marketing executive with a British agency in Japan and Hong Kong,' six years as a marketing manager for CocaCola in Kong Kong, more recently a lecturer at Lincoln College and now conducting a masters programme in international trade strategy at Canterbury University, is spreading the word about effective marketing. Mr Mellon told a meeting of the Canterbury branch of the Economic Society of Australia and New ' Zealand yesterday that New Zealand was in danger of being relegated to the status of mere “trader.”

“Marketing can bring us out of this ‘third-world-stage and bring us stability,” he said. New Zealand now had the capability to overcome its unique problems of season and geography. Technological achievements such as refrigeration and pre-harvest sprays eliminated the problems. “Yet within New ‘ Zealand, we have suffered from groups who . have prevented these skills and

technologies being used” Mr Mellon said.

Traditionally, New Zealand had been dependent on primary products that were traded as commodities. She had been lulled into a “contented subordination” to Britain as a commodity supplier. Recently, great strides had been made by manufacturers in the marketing area; regrettably, their efforts were occasionally sabotaged. Mr Mellon referred to producers who exported an inferior product. Other, better, producers necessarily kept out of the market or were “tarred with the same brush.” He advocated a standard of controls, without encouraging monopoly, as had been imposed in the kiwifruit industry, . .

The effect of vested interests in stifling the market could be seen in various areas, Mr Mellon said. Britain deliberately wished to keep New Zealand subordinate in the role of primary producer so that New Zealand produce would provide turnover for British produce markets. A second vested interest could be seen in tradeunion response to modernisation. in England, especially, companies would weigh up modernisation against' what must be paid to workers, then avoid the risk of increased production. “But progress must occur.” Accountants and trading banks were also examples of vested interests. Accountants, who dominated company boards,

always wanted procedures to look.tidy. They insisted that promotion budgets be a percentage of sales and thus frustrated proper market investment, Mr said.

Trading banks showed a greed for "foreign excharige. New Zealand did not have a direct finance system with most countries; the trading bank gave a reasonable “spread” for only the United States. Canada, Britain, and Australia.

•‘So it is cheaper to deal with Japan by going through American banks titan for our own banks taking their own position with the yen,” Mr Mellon said. “Yet good marketing says we must sell in the currency of the country of destination. We are still treating Japan and West Germany as tiny irrelevancies.”

“In our marketing, we have been faced with a number of obstacles that have slowed down the development of marketing skills. I hope I have identified a few, because no vested interest likes to be disturbed too much,” Mr Mellon said.