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Meat delay won't cost farmers - Key

Tuesday 21 May 2013 8:41 a.m.

Prime Minister John Key is playing down concerns that delays in getting New Zealand meat into China will hit farmers in the pocket.

It's believed up to $64 million worth of export meat is being held up at customs in China, allegedly due to paperwork issues resulting from the Ministry of Agriculture and Forestry's name change to the Ministry of Primary Industries (MPI).

The first shipments were blocked in April, but the hold-up wasn't made public until last week.

Yesterday MPI officials said they weren't sure why the meat was being blocked, but this morning Mr Key said there are two factors – one of which is the name change, and the other that China is implementing stricter border controls around meat.

"The aim there is to stop counterfeit meat, which in the long-term is good for New Zealand, that they're being more robust about that," says Mr Key.

"We can go into a blame game of exactly who, where how it's all started, but the advice we've had is it's being resolved. There's chilled and frozen meat, and chilled meat – which is obviously more perishable – is being prioritised and being dispatched."

Mr Key is adamant the problem isn't "anything more sinister than that".

"The very last meeting we had with the China New Zealand Business Council, when we had the big trip to China a few weeks ago, on the way out the vice-premier, the first thing he said to me – or the last thing he said on the way out – is, 'We want to buy a lot more meat from New Zealand.'

"Now, a vice-premier in the Chinese system doesn't make those comments unless that's the view from the top."

Business NZ chief executive Phil O'Reilly says China is one of the most difficult countries in the world in which to do business.

"It shouldn't surprise us that occasionally we're going to get these kinds of issues occurring, and it shouldn't surprise us also that large bureaucracies sometimes make decisions that are unfathomable," says Mr O'Reilly.

"China's not alone in this – try doing business in Brazil, try going across the border occasionally in the United States, and you will see some of the same kind of what feels like quite capricious, quite sort of strange action from customs officials."

Mr O'Reilly says the Chinese government won't compensate New Zealand companies who lose money as a result of the delay.

"At the end of the day it's going to be the meat companies and the farmers who supply them, I suspect, because the Chinese government's not going to pay up here."

But despite the weeks-long hold-up, Mr Key says it's unlikely Kiwi farmers and businesses will take a hit.

"I'm not convinced they're going to lose a lot of money out of it, if any money," says Mr Key.

"We'll have to see, but the frozen meat is remaining frozen, so that's a delay in terms of its entry across the border but realistically, it's not going to be spoiled. And the chilled meat is prioritised, so that's getting through.

"So I'm not convinced there's actually a lot of cost here."

Federated Farmers President Bruce Wills sides with Mr O'Reilly however, saying sheep and beef Farmers will be affected one way or another as suppliers or shareholders.

"If there is delays or costs, if some of this stuff's got to be sent somewhere else ultimately that cost will come back to be borne by the producer," says Mr Wills.

Mr O'Reilly says as China now eats more New Zealand meat than the UK, there isn't a lot Kiwi companies can do but "swallow" the losses and move on.

"At the end of the day this is, you know, a huge market to China, so of course we're going to keep on going back."

Mr Key says he's in favour of letting the situation "run its natural course".

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