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Seabed claim turns spotlight on Sanford

By Duncan Bridgeman

Friday 25th July 2003

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Shares in fishing company Sanford have taken a battering in recent weeks, with investors apparently nervous about the Maori claim to ownership of the foreshore and seabed.

Sanford, one of New Zealand's biggest fishing concerns, has a significant aquaculture investment, accounting for about 11% of total revenue.

The company has been vocal in promoting the local industry as a strong growth area, although most of its other activities are offshore. Nevertheless the foreshore and seabed claim has created a negative perception of the industry.

Sanford shares have fallen nearly 90c since hitting $5.70 in late May on the eve of the company's solid interim profit announcement. They fell promptly when it was revealed the profit rise was mostly due to foreign exchange gains. The shares traded yesterday at $4.90.

Doubt surrounds the government's stance on the Maori claim to the foreshore and seabed as officials prepare for a drawnout negotiation period.

Further tension could be applied if a moratorium on new marine farming tenders is extended. Fisheries Minister Pete Hodgson has refused to rule out a possible extension amid the seabed ownership row.

Plans to introduce an Aquaculture Reform Bill are now hampered by the foreshore and seabed issue because it deals with iwi claims over water.

Prime Minister Helen Clark is unlikely to back down over public access to the beach and foreshore but has said Maori customary rights will also be protected.

That introduces the possibility of new laws acknow-
ledging a form of customary ownership for Maori while protecting public access.

Sanford has placed a heavy emphasis on aquaculture, with growth in greenshell mussel production a key area.

Marine farm property rights have been a sticking point for the company's growth plans in aquaculture.

Chief executive Eric Barratt won't comment on the issue but the company has made its views felt in its interim report, seeking stronger property rights for marine farmers based on their extensive investment.

Analysts were this week reluctant to link Sanford's recent share price weakness to the seabed debate.

Some of the weakness could be attributed to the company's half-year net profit of $23.8 million for the seven months to March.

While the result compared favourably with the $11.8 million for the six months to February a year earlier, the latest profit was boosted by a gain of $14 million on foreign exchange dealings.

"If you strip out the forex gains it wasn't that flash," said one analyst who asked not to be named.

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