Change or risk losing market share, New Zealand told
Business Times, Malaysia
Change or risk losing market share, New Zealand told
By Rajan Moses
11 April 2006
AUCKLAND: Asean has told New Zealand, whose big dairy and meat product trade to the regional grouping has slowed in recent years, that it risks losing market share to newer competitors muscling their way into the area unless its exporters turn more creative and move quickly to meet changing regional consumer needs.
"You can be left behind if you don’t move hard and fast to reinforce the New Zealand brand in Asean (Association of South-East Asian Nations)... the products from New Zealand are looking a bit dated. We know companies are working hard, but we feel more needs to be done to package the products you have to meet the changing needs of the growing number of younger consumers in Asean," Asean secretary-general Ong Keng Yong said at the Gateway to Asean trade summit here yesterday.
New Zealand businessmen attending the seminar organised by the Auckland Chamber of Commerce agree that trends show New Zealand trade, primarily in traditional exports such as dairy and meat products, with Asean countries has been flattening out after hitting a peak in 2001. Some blame the recently stronger New Zealand dollar for the slower sales while others peg the trend to stronger competition.
New Zealand’s exports to Asean member Malaysia which is its biggest trading partner, for example, dropped to an estimated NZ$396 million (RM894.9 million) in the year to June 2005 from NZ$415.5 million (RM939 million) in the same year-ago period. Main New Zealand exports were milk, food ingredients and meat products while its imports from Malaysia were mainly computers and petroleum oils and crude oil, valued at NZ$482.3 million (RM1 billion) at June 2005, down from NZ$529.2 million (RM1.1 billion) in the same year-ago period.
"New Zealand should not take things as they are but compete more with other new entrants to the Asean region such as South Africa, India and the Europeans. You must reinforce the New Zealand brand in Asean," Ong said, noting that New Zealand wine exporters had carved a niche market for themselves in the region through clever marketing techniques.
"The wine marketing has been exceptional. This technique must also be extended to other products."
Renowned New Zealand pinot noir red wine and sauvignon blanc white whine, although slightly more pricey than some similar range of wines from other countries, have found a strong following in the Asean market, he said.
Ong said any slack in traditional New Zealand exports to Asean could be taken up by finding new areas that can be traded with the region in the services sector, such as in the creative (movie industry), information technology (IT) sector and higher education, areas in which New Zealand was known to possess high quality. Asean could also be used as a test market or a market for staging new and innovative New Zealand products.
While New Zealand and Asean enjoyed cordial ties, it was important that New Zealand expanded its current trade levels with key Asean countries to avoid trade imbalance to become a thorny issue between the two sides, he added.
"We don’t want trade imbalance to become an issue and are keen that something is done to even things up a bit," Ong said.
Some summit participants said they looked forward to the completion of more New Zealand free trade agreements with other Asean member countries such as Malaysia to facilitate expansion of trade with the region. The New Zealand Free Trade Agreement (FTA) with Malaysia is expected to be completed early next year while the country already has an economic partnership pact with Singapore and Brunei and an FTA with Thailand.
There are also moves to conclude a joint Australia-New Zealand- Asean FTA and negotiations are under way now. Expectations are that it may be ready sometime next year, but will take several years to be implemented as Asean countries take some time to standardise their customs and other regulations.
"If we can finalise our FTAs it will make life a lot easier (for our trade)," said Martin Harvey, lead negotiator at the New Zealand ministry of foreign affairs and trade.
Another participant at the summit, Tony Nowell, who is managing director Griffin Food Ltd and chairman of the Asean combined Business Council, said Asean offered easier entry for New Zealand goods than China and this should be exploited.
"Some of our top trading partners are in Asean, but our trade balances with some are out of whack. The dynamics of high growth in the region and its closeness to New Zealand make it a good place to invest and trade in. Asean is complementary not a competitor," he said.
