The National Māori Authority is calling for a boycott of New World and Pak'nSave after a decision to dump Māori-owned seafood provider Sealord's products in favour of a foreign brand .
Jobs at Sealord are on the line after New World and Pak'nSave parent company, the Foodstuffs (North Island) cooperative, decided to "delete" some of the iwi half-owned fishing company products following a range review. Sealord says 50-80% will be removed from shelves but Foodstuffs North Island disputes that, saying the supermarkets are continuing to range 70% of Seaalord products.
Māori Authority Chair Matthew Tukaki says the decision is two-faced and reeks of profiteering.
“What I find incredible is they [Foodstuffs] talk about supporting local industry. Let’s be really clear here – this large supermarket chain is going to do what? Import low and substandard products in stark opposition to products that are sourced sustainably in New Zealand, by a largely Māori owned business?”
Sealord employs more than 1000 people in Aotearoa and 230 overseas. The changes, to take effect from November 1, will shrink its 80 per cent local market share, to less than 20 per cent, it says.
Tukaki’s frustration is echoed by Katherine Rich, the chief executive of the Food and Grocery Council, which represents local producers. Rich says Foodstuffs NI's decision wasn’t decided according to demand, affordability, food quality or local sourcing but rather on the profit margin returned to Foodstuffs.
During negotiations, Sealord offered to raise Foodstuffs' profits by as much as 50 per cent but Rich says it wasn't enough to satisfy the cooperative, which is with fellow supermarket Woolworths facing a Commerce Commission duopoly study amid revelations Aotearoa has amongst the highest food costs in the OECD.
‘We’ve never experienced such an extreme margin grab. It's quite extraordinary at the time they are in the Commerce Commission spotlight. They're snubbing their nose at the commission and government’s process,’ she told Newsroom.
Sealord fish is to be replaced by fish processed by American multinational Bird's Eye. It will process New Zealand Hoki and Alaskan Pollock in Australian facilities instead of Sealord's Nelson plant.
However, Foodstuffs NI says the Alaskan Pollock will only be used if there are shortages of Hoki, which has not happened for several years.
Shelves of Sealord products in a Wellington supermarket have today been restocked with Alaskan Pollock processed in China and carrying Foodstuff's own 'Pams' brand.
Rich says at the same time as it’s de-shelving Māori-owned Sealord, Foodstuffs is vertically integrating by building up its own fishing business.
In 2019 it bought Leigh Fisheries, a business with 53 independent boats catching everything from lobster, snapper, john dory, bluenose, groper, southern bluefin tuna and swordfish.
News it was being swapped out for Chinese and American substitutes could hardly come at a worse time for Sealord. In February two of the companies' factories were banned from exporting to China after the Chinese customs authority (GACC) claimed they detected Covid-19 on packaging from the factories.
The Ministry of Foreign Affairs and Trade discounted the claims with foreign relations experts saying Sealord was collateral damage for Aotearoa calling Beijing on its incursion into Hong Kong and treatment of Uyghur Muslims. The sanctions nonetheless packed a $3 million punch to Sealord's profits.
'Support local products'
Sealord’s chief executive, Doug Paulin, initially kept quiet on the Foodstuffs debacle, reportedly for fear of further wrath by the nation’s supermarket duopoly but, in a statement, now concedes the ‘significant reduction in our range… will have follow-on impacts for our operations in New Zealand'.
He says staff in merchandising and distribution across the North Island will be affected.
"We are seeking clarity on Foodstuffs North Island’s rationale for this decision," he added.
Tukaki is being more direct, calling on the chain to reverse the decision and asking all New Zealanders to start looking for their frozen goods elsewhere.
"Boycott Foodstuffs and take your wallets, handbags and eftpos cards to chains that do support local products."
"We all have a responsibility to build our local enterprise up and not shaft them at a moment's notice," he said.
Foodstuffs North Island head of grocery Jocelyn McCallum says its goal is to offer customers the best value and to eliminate duplication in its product offering.
"Our range review process has been guided by a range of customer data and insights to deepen our understanding of customer needs, customer loyalty, brand loyalty and customers’ willingness to buy alternative products within a category," she said.
Sealord products will continue to be carried at rival Countdown supermarket across the North Island.
Foodstuffs NI has argued there is significant duplication of products within the category. "We started this process with a category that had 62 ranged products, of which only 20 made up 80% of the total sales of the category. Our goal is to ensure we are offering our customers products that meet their needs and this means removing duplication in the range to enable more choices for customers.
The cooperative says it works with the large players - Sanford, Moana, Talley’s, United, Sealord and many small to medium-sized business including fishers and its own Leigh Fish company "where we have close connections with many iwi groups."
"We have just recommitted to our long-term arrangement with Sanford."