The country's potato industry says it is "relieved" an investigation has been launched into the threat of EU exporters dumping surplus product into New Zealand, undercutting local producers.
The investigation by the Ministry for Business, Innovation and Employment (MBIE) comes after Potatoes New Zealand (PNZ), the association representing the industry, earlier this year called for Government protection from "predatory" exporters, namely Belgium and the Netherlands.
With COVID-19 lockdowns in Europe causing a lack of consumption on the continent, with the hospitality industry in particular feeling the brunt of the pandemic, surplus frozen potato fries and wedges are being "dumped" in New Zealand and sold much cheaper than local products, presenting a threat to the local industry, PNZ says.
The country's potato industry is worth just over $1 billion annually, with 85 percent of all fries consumed in New Zealand being produced here.
The launching of the investigation comes after PNZ submitted an application to MBIE in July, calling for anti-dumping duties on potato products.
"At the time of the application the surplus in Europe was 1.5M tonnes, today it is estimated at 2.6M tonnes and growing by the minute due to the impacts of further lockdowns in parts of Europe," PNZ said in a statement on Thursday.
"The dumping and threat, combined with the effects of supply chain disruption caused by COVID-19, created an extraordinary situation that required investigation."
Adam Dubas, MBIE manager trade and international, told Newshub MBIE was satisfied information given to the ministry by PNZ justified an investigation.
"They consider that although dumping is not currently causing injury, there is a threat of injury due to imminent increases in dumped export volumes from Belgium and the Netherlands," Dubas said.
"The applicant has requested that provisional anti-dumping duties be imposed to prevent injury occurring during the period of investigation, so the next immediate step is for MBIE to advise the Minister on whether there are grounds for such duties to be imposed."
PNZ chief executive Chris Claridge told RNZ the investigation "formalises the Government's involvement and ensures the evidence we've put in front of the Government is dealt with accordingly".
The investigation could take up to six months.