Dairy row costs $10M in exports

Press, 2 November 1989, Page 1

Dairy row costs $10M in exports

By

DIANE KEENAN

The New Zealand Dairy Board has lost more than $lO million in export contracts because of the industrial dispute between dairy workers and employers.

A board spokesman, Mr Neville Martin, said the board had to default yesterday on an $8 million contract to supply infant milk formula to the Soviet Union. In addition, 700 tonnes of skim milk powder from the Westland Dairy Company at Hokitika could not be included in an export order to be shipped to Mexico this week.

The dispute means 14.5 million litres of milk will be spilt today, about twice the seven to 10 million litres spilt yesterday, employers say. The increase follows stopwork meetings and suspensions yesterday at several more dairy plants in Waikato, Taranaki and Northland.

Mr Martin said the board had asked dairy workers to lift their load-out ban so $2.5 million worth of skim milk powder could be shipped from Nelson.

“But the workers refused and the ship will have to leave without the balance of the order,” he said. Mr Martin described the loss of the Soviet contract as "particularly disappointing.” The urgent shipment of 1500 tonnes of formula was being manufactured at the New Zealand Co-operative Dairy Company’s Waitoa plant and packed at New Zealand Dairy Packers in Hamilton. Both sites had been closed for three days. “It is impossible now for the manufacturing and packing to be completed in time to meet ship-

ping deadlines,” Mr Martin said. He said the board was concerned at the long-term implications for New Zealand’s credibility as an exporter of dairy products to the Soviet Union. “The board has worked hard for two years to gain the contract to supply the formula to a multinational pharmaceutical company,” Mr Martin said. The board had hoped that the initial shipment would result in return orders. “We may have blown a key opportunity to get into a valuable business,” he said. The secretary of the Dairy Workers’ Union, Mr Ray Potroz, said yesterday that he was amazed the industry had been prepared to lose an $8 million contract. The workers packing the export order had been suspended after they took action by “having smoko at the same time.”

The dairy . chairman of Federated Farmers, Mr Richard Alspach; reacted angrily to the market opportunity lost. “It ought to be of major concern to dairy factory workers that their industry, which should hold every prospect of long-term job security well into the next century, is in fact very vulnerable,” he said. Dairy workers took industrial action on Monday after a breakdown in their award talks on Friday. Employers had raised •their initial pay offer from 5.5 per cent to 6.25 per cent, while

the union lowered its claim from 10.2 per cent to 8.2 per cent. In Canterbury, the action has been limited and milk-processing has not been affected.

Processing in the country’s main dairying area, Waikato, could stop in the next two days if the union introduces the second phase of its industrial action.

Milk worth more than $4 million has been dumped and further suspensions and factory shutdowns are likely as the workers’ action escalates. Mr Potroz said about 1200 ■workers had been suspended and the value of the milk lost was more than the annual value of the disputed 2 per cent wage rise.

Picket lines had been set up at most plants, but workers had been advised to avoid confrontations.

The union’s intention was not to close factories, but to have them remain open and run at a higher cost. Mr Potroz accused employers of escalating the dispute by suspending workers. “We are still trying to get our suspended workers back on the job,” he said.

The dairy employers’ general manager, Mr John Murdoch, said employers were not prepared to stand down or compromise. He said they had reinforced farmer statements that the 6.25 per cent unconditional wage offer is more than enough.”