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New Zealand PM says that Buy Australian push could breach CER

New Zealand Prime Minister, John Key will be meeting with Tony Abbott this week to discuss concerns that the “Buy Australian” supermarket campaign is forcing New Zealand products off shelves.

Australian supermarket giants, Coles and Woolworths, both signed deals with troubled frozen vegetable processor, Simplot in September last year, committing both retailers to purchasing 100 percent Australian grown for their private label lines by 2014. A move which saw the retailers replace imported product from several countries including China and New Zealand with locally grown.

Key, who arrived in Sydney yesterday said that he is investigating whether the campaign is illegal under the Closer Economic Relations agreement – one of the most comprehensive bilateral free trade agreements in existence.

“It is undetermined yet whether it is a breach of CER,” Key told SBS News. “But even if it’s legally not, it’s arguably in my view, a breach of the spirit of CER.”

Ian Harrison, Chief Executive of the Australian Made Campaign doubts that the retailers' push to source more Australian produce over imported is in breach of CER, stating that the decision to source locally was that of the supermarkets, not government.

“The reality is that the retailers are not part of government, they make decisions on what they stock and what they make available to their customers,” Harrision told SBS News.

“I think New Zealand manufacturers that have lost their place on the shelf would be no different to a lot more Australian manufacturers that have probably lost their place on the shelf as a part of the restructuring of the retail profiling that a major retailers have done.”

Australia’s food manufacturing sector has been suffering over the past number of years as an influx of cheap imported products have filled supermarket shelves, resulting in the near closure of fruit and vegetable processors, Simplot and  SPC Ardmona.

Simplot’s Bathurst plant in NSW as well as its Devonport plant in Tasmania were both under threat of closure due to an intensely competitive industry and unsustainably high costs. Simplot’s new contracts with the reatilers are reported to have potentially saved up to 200 local jobs.

 

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