Report finds some dumping of potato chips but no risk to industry

The sector says the findings are frustrating.
The sector says the findings are frustrating. Photo credit: Getty

By Sally Murphy of RNZ

The Government has found evidence a Dutch company is dumping surplus frozen fries in New Zealand - but says it's not affecting the local industry.

Last year Potatoes New Zealand raised concerns about an increase in imports from Belgium and The Netherlands at low prices which were undercutting local growers and processors.

The Ministry of Business, Innovation and Employment (MBIE) launched an investigation into the dumping - and has just released its draft report.

It contacted potato processing companies in Belgium and the Netherlands and asked them to fill out a survey.

That information, alongside Customs data, found there was a spike in imports from the two countries in June and July last year - and one Dutch company, Lamb Weston, was in fact dumping product here.

Europe has been left with an oversupply of frozen potato fries and wedges as COVID-19 lockdowns have meant less people are eating out.

The MBIE report said dumping was likely to continue but concluded there was not a threat of material injury to the domestic industry as a result.

Accordingly, it was likely that advice to the minister responsible would be to terminate the investigation.

Findings frustrating for industry

Potatoes NZ (PNZ) said it would review the report this week and meet with processors next week to determine its next move.

Chief executive Chris Claridge said the findings were frustrating.

"We're pleased the Government agrees with the industry that dumping is occurring in the New Zealand market but we don't agree that it doesn't pose a material threat to the industry," Claridge said.

PNZ would consult with the industry before making a further submission to the final report, he said.

"Our contention has been the potential risk and that's what we're acting on - we saw a sharp, significant increase in frozen fry imports and we saw processors not issuing contracts to growers because they were worried about the marketplace being un-economic for them to operate in.

"The threat still exists today and it's not going away because COVID isn't going away in Europe. We believe there is excess capacity and we have processors admitting to dumping, it's just the Government doesn't see the level of material threat the same as the industry does."

Interested parties had until 30 April to make further submissions to the investigation.

MBIE said no final decision had been reached at this stage as the investigation was ongoing.