Institute challenges NZKS benefits
A research institute has raised concerns about New Zealand King Salmon’s economic benefits in a critical report.
The McGuinness Institute, described as an independent research institute, released a case study of King Salmon’s financial position on Friday.
However, King Salmon described the report as premature and ‘‘pointless’’.
The report was written by institute founder and chief executive Wendy McGuinness, a chartered accountant who owns a bach in the Marlborough Sounds.
The report said the institute was using King Salmon as a case study for the public disclosure of information, to illustrate an information gap between what was provided to the public and what was required.
It included analysis of King Salmon’s feed content, rising water temperatures, employment and financial information, concluding King Salmon was vulnerable to financial and environmental shocks.
‘‘[The] government should reevaluate the level of support it contributes to NZKS,’’ the report said.
McGuinness said the report relied only on information available from the public domain. The McGuinness Institute was funded by the McGuinness Foundation Trust, a trust set up by McGuinness and her husband, a Wellington property developer.
‘‘The institute queries whether the New Zealand government should re-evaluate the level of support it contributes to NZKS based on our view that this business might be unable to deliver sustainable outcomes over the long term.’’
Although King Salmon reported a profit of more than $5 million in 2015, this depended on one-off items and a decision to sus- pend interest on shareholder loans, the report said.
New Zealand King Salmon chief executive Grant Rosewarne said the McGuinness report was ‘‘pointless’’ and was trying to assess benefits far too early, since the salmon harvest was still taking place.
The company’s 2016 financial report would confirm the strong profitability of the business, Rosewarne said.
‘‘I don’t think readers will understand the point of the report,’’ Rosewarne said. ’’What I do think they’ll understand is that we recently opened a new farm called Waitata which, in full production, will only be one-and-a-half surface hectares but will generate $60 million in annual revenue and employ 75 people.’’
The number of staff employed by King Salmon had dropped to 380 or 390 people, but this year that increased to 440, Rosewarne said.
He did not deny King Salmon had four ‘‘difficult’’ years but each year a profit had been made, and the company was coming out of that phase now.
The report made recommendations to central and local government as to how to handle Resource Management Act applications from King Salmon and other companies in the future.
Companies reporting information such as jobs and export earnings as a condition of resource consent were suggested. The report recommended King Salmon produce an annual report including ‘‘non-financial information, such as how its operations impact the public estate’’.
McGuinness said the report was part of the institute’s Project 2058: One Ocean which aimed to explore New Zealand’s public policy landscape around ocean management, and to create transparency.
McGuinness said she had always been open about her Marlborough Sounds property.