‘Value added productivity’ is a myth, welcome to Basic Bitch NuZilind

By
Martyn Bradbury
-
10
522

As TDB has been pointing out for sometime now…

Fonterra’s $4.22 billion sale to Lactalis raises long-term concerns, professor says

A leading agriculture professor is warning about potential risks from Fonterra’s billion-dollar sell-off of its consumer brands.

Last month, Fonterra announced the sale of its consumer businesses, including brands Mainland and Anchor, to French company Lactalis for $4.22 billion.

While the sale will see farmers get a cash boost with a tax-free return of $2 per share, academics fear Fonterra is losing its value-add capacity.

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Alan Renwick, an agriculture and economics professor at value-adding, said the sale will create problems in the long run.

“They’re getting a very good price [but] we are giving up something for this money, and that is the value-adding part of the business, the consumer side.

“We do need to consider what we’re giving up, these future earnings and value added that those brands, the policy now will be to focus down on their ingredients and food service.

“So, we’re putting our eggs in one basket and moving away from having a more diversified business.”

…’Value added productivity’ is a myth, welcome to Basic Bitch NuZilind!

We keep getting told we feed 40million, but that number is based on us selling milk powder as a base line ingredient filler for the manufactured food industry. The PR spin pretends it’s wholesome NZ cheese and milk and meat those 40million are eating when the truth is the vast majority of what we export is basic bitch milk powder used as a filler ingredient!

The vast majority of our export dairy is milk powder used as an ingredient filler in the heavily processed food manufacturing industry, all that value added grift was to sell our green credentials, but the Dairy Industry is so polluting that they’ve decided it’s easier and less political fall out if it dumps the pretence of environmentalism and just produces mass milk powder for food so drenched in fat and sugar that unsustainable dairy is the least of their sins.

Fitch Ratings analysts warned NZ this year that the next 10 years of economic growth was dangerously stunted.

This matters because it is ratings analysts like Fitch who warn the market if we are good for all the money we borrowed.

They base that on future projections of our economic cycle and their analysis is terrible.

Fitch have made clear to us that Dairy, Tourism and exports to China have waned and can not grow beyond the manner in which we have already grown them.

Regressing back into being a base ingredient producer with no added value be it milk powder, live cow exports or raw logs, is not a solution.

 

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10 COMMENTS

  1. I want to know does the sale include the manufacturing plant and the jobs there in ,or just the labels and IP .any business turn a 6-8% profit in this day and age is well worth keeping I would have thought .Perhaps that why the new owner bought it .

    • High tech? The silicon valley of the South Pacific. Computer game central? An appendage to satellite communication and space surveillance? Nah …just a niche if that. And there are probably quite a few niche areas that are doing ok. Truth of the matter however we’ve always been a primary producer – meat, wool, trees, fruit, crayfish, dairy. Very little or no added value. Arguably good for NZ Inc back in the day – and better for those in the business – but now with the big monopolies and the current tax regime less so. We aspire to first world living but can’t pay for it. Tourism? Provides the provinces with revenue, that’s if you’ve got a glacier or fjord on your back doorstep. We could try minerals – but not cool at present. But very lucrative if you got the rare ones. Gas? Hell no. Anyway we’re not the Lucky Country with vast mineral reserves and a roughshod attitude towards indigenous populations. Why not housing? Create a housing bubble and sell to each other at inflated prices. And while were at it, invite rich folk from overseas to buy at the top end. Oh … the ‘housing economy’ has been happening for a while now and truth be known has just fucked things up for ordinary people. I’m outta ideas joseph. More farmers markets perhaps.

  4. Value added is too complicated for the wretched spawn of Gnat families that are shuffled off to Fonterra sinecures. They have important gliding on to do, and no time for or interest in product or market development, much less customer service. The parliamentary Gnats are the cream of this stunted crop – the ones Fonterra gets are almost unimaginably thick.

  6. I have recently put up the pathway that some NZ brands have followed, as they have sold their businesses trying to retain a basic part to continue with. They have not been able to do so. The world is bigger than the small brains of NZs can grasp. At present I and another of my age are wearing quality raincoats brought from op shops. Often these were made by companies built up by refugee Europeans with smarts in manufacturing, design and sales. They invested their energies and skills in NZ post-WW2 and are now aged and dying out; NZ is fracturing and reverting towards its simpler bovine default.

    Nothing wrong with bovines and farms but the children of the farmers don’t stay on the farm, they get some saleable skill and go to town to join the middle class hoi polloi. Everything has been upward for them, they have gone to the best schools, and now are ready to continue the enjoyable societal culture selling ideas, fashion, planning, management, tech, but nothing of substance; the underpinning of the economy with real productivity of goods is taken for granted, far too plebeian. But like it or not, the classes are compressing – so join the plebs because there is vitality arising from them, different than that of the complacents. As a personal slogan perhaps, cultivate the land, and cultivate the practical and people-persons, help each other out. these are the people to more- than-survive with, and may become dearer to you than family who sometimes will be a little more aloof and self-involved at this time of fracturing.

  7. If they are “getting a very good price” (as the professor has pointed out) that surely indicates the buyer sees the current and future value of what is being purchased. The buyer could be wrong of course, but you have to question why do it

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