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Lobbyist optimistic about Heinz production switch

Tuesday 31st May 2011

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The decision by Heinz Australia to relocate some production to sister company Heinz Wattie in New Zealand is a sign that the business environment and tax policies are encouraging international companies to shift their operations here, says a lobbyist.

Manufacturing NZ executive director Catherine Beard said that New Zealand’s 28% corporate tax rate and comparatively low wage rates was a strong incentive for Australian manufacturers to shift "at least part of their production" to New Zealand.

Food manufacturer Heinz said last week it would move part of its sauce making operations to its subsidiary Wattie's in Hastings within the next 12 months, as well as beetroot canning. Both companies are owned by a multinational, H J Heinz Company, though Heinz Wattie's is best known here as Wattie's.

Heinz Australia has said it will close a tomato sauce factory at Girgarre in Victoria - at a cost of 146 jobs - and move tomato processing to New Zealand. Stopping beetroot processing at its Brisbane factory, which produced around 180,000 tonnes of canned pineapple and beetroot, drinks, jams and sauces, and moving the work to Hastings will cost another 160 jobs, while 33 will be lost at it plant at Wagga Wagga in southern NSW.

Beard said that though the transfer of processing work to New Zealand would not directly result in any more jobs being created - as the additional manufacturing would be absorbed by Wattie's current factories - the move was "encouraging".

"Manufacturing is not necessarily dead," she said, and there was a possibility that more manufacturers would consider moving to New Zealand.

Heinz had said that New Zealand’s business environment would allow the company to become more competitive on the international market place, and accelerate future growth, said Beard.

But Heinz Australia chief executive Nigel Comer told The Australian newspaper the move to New Zealand was not because production was cheaper than in Australia.

"It's not so much a matter of (New Zealand) being more cost-effective; it's just that there's a duplication of the infrastructure and the factories across the region," he said.



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