Daniel Silva comments on the latest news headlines impacting on export trading companies.
Daniel Silva comments on the latest news headlines and stories impacting on New Zealand’s trading sector.
Haven’t we done well?
"Today, after 14 years of existence, Fonterra has around 85 percent market share of New Zealand milk,” Fonterra chairman John Wilson said in He added, “We have grown our ingredients' milk powder revenue from $7.9 billion in the 2002/03 financial year to $16 billion in 2013/14, and our consumer and foodservice revenue from $4.6 billion to $6.3 billion in the same period.”
Wilson is the latest in a series of self-congratulating farmer-politicians.
Back in 1998, Neville Martin, a public affairs manager of the Dairy Board, told us, “You may be unaware the Board's sales in the Asian region have climbed by $5,000 million over the last years. Consumer sales are growing at 15 percent annually – which you will appreciate, compares with the average of four to five percent achieved by the world's leading fast moving consumer goods marketing companies.”
To which we replied, “We know that the performance of [producer board] monopolies is indeed very good, mainly because they keep saying that it is. It is, however, apparent that it is not good enough to withstand competition from other exporters.”
Likewise, we could tell Mr Wilson that he should not be too proud of the size of his domestic milk market share. Fonterra's dominance of that market is not so much a reflection of superior competitive performance, but rather the result of its success in persuading politicians to exempt its exports from the anti-