C.E.R. 'threat’ to grocery jobs

Press, 11 June 1982, Page 26

C.E.R. 'threat’ to grocery jobs

PA Auckland New Zealand's multimillion dollar grocery manufacturing industry could be doomed under the closer economic relations agreement (C.E.R.), said the executive officer of the Grocery Manufacturers' Association,- Mr Ernest Newman. In Auckland, thousands of jobs could be lost as the industry migrated to Australia. he said. He said that many multinational companies in the 70member association 'would gradually withdraw and move to Australia. The loss of the industry and its $l5OO million-a-year turnover would not only affect the country’s economy, he said, but lead to redundancies among 17,000 employees. "Our stand on C.E.R. from

the outset has been that we can see no benefit to our industry. That position has not changed since we saw the exposure. draft,” Mr Newman said. New Zealand grocery manufacturers suffered a number of big disadvantages compared with their Australian competitors, who were able to buy a lot of raw materials and packaged items much more cheaply, he said. Mr Newman said many of the multi-nationals had set up in New Zealand largely because of import licensing. But these would gradually phase out and move to Sydney or Melbourne. He could not estimate how many of the jobs, largely based in Auckland, would disappear or shift to Australia. “Il will be a chicken-and-egg situation with undoubt-

edly a lot less investment and fewer jobs in the industry.” he said. New Zealand would also have to spend overseas funds to buy in products now made locally. Mr Newman said the supply of raw materials such as wheat and vegetables from primary producers to processing plants would also suffer. It was also a popular misconception that groceries would be cheaper under C.E.R., as there was not much difference between prices in the two countries when the exchange rate was taken into account. The managing director of Aulsebrooks and general manager of Kelloggs, Mr Paul Brosnahan, said that he agreed with Mr Newman, especially with to multi-national companies. When looking at investing

capital or plant, none of these would want to duplicate multi-million dollar investment in two countries so close together. “We are going to see a migration of Auckland industry to Sydney and Melbourne. It will mean fewer and fewer jobs — there is nothing surer,” he said. Mr Brosnahan said it was questionable whether grocery prices would drop, as it was still necessary to get across the "most expensive piece of water in the world.” He believed the many subsidies on raw materials in Australia and the cost of imports had not been considered. Mr John Potter, president of the Food Manufacturers' Association, a separate group within the Manufacturers’ Association, said the matter was also of concern to his group.