The report, an Investor’s Guide to the New Zealand Food & Beverage Industry 2013, says that Asia is now New Zealand’s largest export country destination, accounting for more than 40 per cent of export value.

“The report confirms China is the single largest food and beverage export destination, and Asian countries make up 10 of the top 25 destinations. The New Zealand primary sector is in the middle of a fundamental transition from feeding Westerners to feeding the Asia-Pacific region,” Mr Joyce says.

The report suggests that growth in the New Zealand food and beverage sector is being driven largely by East Asia, followed by solid performers such as Australia/Pacific and South-East Asia, and smaller but fast-growing export markets like South Africa and South Asia. Our traditional export markets like North America and Europe are growing slowly.

The Investor’s Guide to the New Zealand Food & Beverage Industry 2013 report, by Coriolis Research, is an updated version of the report of the same name from 2011. It makes a strong, factual case for investment in the New Zealand food and beverage sector.

The report is part of a suite of reports released under the Food & Beverage Information Project – the most comprehensive analysis of New Zealand’s food industry ever undertaken. The objective of the report is to makes a strong, factual case for investment in the New Zealand food and beverage sector.

The report is available at www.foodandbeverage.govt.nz.

“The Food and Beverage Information Project’s Industry Snapshot is the definitive outline of the state of the industry in New Zealand,” Mr Joyce says.

“Food and beverage is a great Kiwi success story and there are huge opportunities opening up. Asia now buys 40 per cent of our total food and beverage exports while the UK buys only 5 per cent. The rising Asian middle class is demanding high-quality products and New Zealand is in an excellent position to meet that demand.”

The Industry Snapshot is part of the Food and Beverage Information Project, launched late last year by the Minister of Economic Development. It is the most comprehensive analysis of the New Zealand food and beverage industry ever undertaken.

The report shows that 75 per cent of the top 64 food industry firms by turnover are owned by New Zealanders, with Japan, Australia and the US accounting for the majority of foreign ownership.

“The Food and Beverage Industry Snapshot lays down the challenge. It shows us where the industry is doing well and where we need to do more work to build our competitiveness and capture more value in global markets,” Mr Joyce says.

“The industry exports $25 billion in food and beverages each year. Much of this is ingredients which others use to make finished products. The report estimates that international consumers pay from $140-$200 billion at the checkout counter for food products that are primarily of New Zealand origin.

“It’s not all about producing more. It’s also about capturing more of that value for New Zealand. New Zealand is about the same size as Italy, yet Italy exports twice as much food and beverage by value as New Zealand as well as feeding a population of 60 million.”

For more information visit www.foodandbeverage.govt.nz

“Much of what they claim is untrue and causing many people unnecessary concern,” Ms Wilkinson says.

“The Bill is designed to simplify 30-year-old food safety regulations and ultimately aims to reduce our high level of food-borne illness and corresponding economic cost. It’s estimated food-borne illness caused a $162 million loss to the New Zealand economy in 2010.”

“The current system is prescriptive and based on rules and inspections – which are often costly to food businesses. The new regime will create efficiencies for traders and improve food safety.

Ms Wilkinson says the Bill’s opponents are whipping up fears that small traders such as community gardens, food co-ops, heritage seed banks, farmers markets, bake sales and roadside fruit and vegetable stalls will be caught up in costly red tape.

“That is simply not true. This Bill won’t in any way affect people’s right to grow food and to then exchange, sell or trade it.

“Small traders such as those running roadside stalls or selling their own horticultural produce at markets are generally classed as low risk and will not need to register. They will simply receive a free ‘food handler guidance’ information pamphlet.

“Food grown at home for personal or family consumption, or given away to friends is excluded from the measures in the Bill,” Ms Wilkinson says.

The new regime will have three regulatory levels of safety based on risk, with those food businesses classed as high risk (such as restaurants or baby food manufacturers) having the highest level of requirements. Businesses presenting a medium level risk (such as bakeries and pre-packaged food processors) would be subject to national programmes (a more flexible and generic approach), with those presenting low risk receiving food handler guidance.

The draft Bill has been through a full public consultation process and has been passed by Parliament’s Primary Production Select Committee with cross-party support.

“This is an important piece of legislation and I am conscious that Labour and the Greens have new Food Safety spokesmen. I am more than happy to meet with these parties to discuss the Bill and any concerns they have to ensure that it delivers what we all want – safer food and a reduction in illness, without increasing compliance costs to industry.”

“The Bill is intended to modernise and enhance our domestic food safety regime – not over-regulate it.

“I encourage people to visit www.foodsafety.govt.nz to read what the Bill actually contains, and not to listen to the scaremongering from some of the Bill’s opponents.”

Food Bill – Questions & answers

1. Is there currently a Food Act in New Zealand?

Yes. It is the Food Act 1981, which is now 30 years old and needs updating. This covers all food for sale in New Zealand. The main purpose is to ensure that the food people buy is safe to eat.

The Food Bill focuses on food for sale and profit, not the trade of home-grown food between neighbours or within a community.

2. When was the Food Bill first released to the public and when will it become law?

The Food Bill was introduced to Parliament on 26 May 2010. It has been through a public submission process and is now waiting to proceed through the House. There is no set date on when it will be passed by the House and become law.

3. Has there been consultation with consumers on the Food Bill?

Yes. The NZFSA (now part of MAF) has actively consulted with consumers from 2007-2010 on the domestic Food Review and the Food Bill. This consultation has included forums and consumer groups, discussion papers and submissions.

The NZFSA website and publications have also been used to support consultation. Consumer enquiries by phone and email up until 2010 numbered 1670 and there have been 73,596 page views for the Food Control Plan, Food Bill and the Domestic and Food Review.

4. Were propagation food seeds unintentionally captured by the Food Bill and what happens when such examples are found?

Yes. Propagation food seeds were unintentionally captured by the Food Bill. When this came to the Government’s attention, the Minister directed officials to amend the definition of food to ensure propagation food seeds would not be captured by the Food Bill.

When activities are identified as being unintentionally captured, the Chief Executive of MAF has powers under the Food Bill to exempt certain activities from all or any requirements of the Act.

5. What are the current rules around bartering or swapping food?

The Food Bill will apply to food that is sold, or bartered on a commercial basis. The Food Act 1981 currently includes barter in the definition of sale. This definition has not prevented this activity from freely taking place between individual members of the community, that is, those that are not in business.

If bartering was excluded, it would be possible for some commercial food operations to avoid their regulatory responsibilities.

6. Does the Food Bill stop neighbours and communities bartering or swapping food?

No. It is an age old Kiwi tradition for people to grow food for themselves and swap their excess with friends or neighbours. The Food Bill will not prevent this tradition from continuing.

7. How will fundraising galas and sausage sizzles be treated under the Food Bill?

Charitable and community events such as sausage sizzles, home bake sales, and other fund raising events may still occur without requiring registration provided they are held no more than 20 times a year (by a charity or an individual).  Fundraising activities can continue as they always have.  This is an important part of Kiwi culture that the Bill protects.

Organisers of these activities will simply be provided with access to ‘food handler guidance’ tips and advice on how to ensure food sold to others is safe to eat.

8. Will fundraisers or those bartering or swapping food be required to register anywhere?

No. Those running fundraising activities or bartering and swapping food are not currently required to register and this will not change under the Food Bill.

9. Do producers of jams and pickles have to register?

Commercial producers of jams and pickles will be subject to a national programme level 2. They will be required to register their operation and undergo occasional verifications at a frequency that reflects the level of risk.

However, those who simply produce jams and pickles for school galas and fundraisers will not have to under-go any sort of registration.

10. Will the Food Bill allow for exemptions?

Yes, it will be difficult for the Bill to capture all aspects involved in the sale and production of food. The Chief Executive of MAF will have the ability to exempt a person/business or class of persons.

A small jam maker could apply for an exemption and operate instead under food handler guidance with a general obligation to sell safe and suitable food.

11. How will people access information and advice on the safe preparation of food?

Information will be provided as ‘food handler guidance’ tips and advice provided by the Ministry of Agriculture and Forestry free of charge on the website, and via territorial authorities throughout the country.

12. What powers do Food Safety Officers (FSOs) have?

There are very clear guidelines set out in the Food Bill for FSOs entering a premise with a search warrant (sections 289-298).

The Food Bill only allows FSOs to access and enter the areas of premises where the food is being prepared. There is no provision in the Bill for FSOs to be armed.

If entering a place without a search warrant, the owner or occupier of the place must be given reasonable oral or written notice by the FSO unless giving notice would defeat the purpose, or the place is owned or occupied by the Crown.

13. Are FSOs immune from prosecution?

The principles and provisions of the Bill in regards to immunity from criminal and civil liability are substantively the same as those provided for in the existing Food Act 1981 which have been in use for over thirty years.

Clause 322 of the Food Bill states that FSOs are protected from civil or criminal liability for any act that the person does, or omits to do, if the act is part of their functions or duties under the Bill, or they are exercising their powers under those duties.

The FSOs must act in good faith and with reasonable cause. Failure to do so means they are no longer immune from prosecution and they can also be sued.

There are similar provisions in the Animal Products Act 1999, the Biosecurity Act 1993 and the Commerce Act 1986 among others, so this in not radical or new.

Asahi’s New Zealand unit declared it had 90.6% of Charlie’s, allowing it to compulsorily the rest under takeover law. Directors Stefan Lepionka and Marc Ellis were among major shareholders, who accepted the offer early, reiterated Scoop New Zealand.

According to Scoop, the $129 million acquisition comes after the Australian Competition and Consumer Commission cleared Asahi to buy P&N Beverages, that country’s third biggest juice and chilled Drink Company with brands including Pop Tops, Extra Juicy and Tiger ginger beer.

The maker of Asahi Dry beer is also reportedly looking at Independent Liquor, the company founded by Michael Erceg, who died in a helicopter accident.

The Asahi.com website reported that Japanese mergers and acquisitions of foreign companies reached a record 3 trillion yen in the first half of 2011, indicated the report.

The purchase of Charlie’s comes after the company won shelf space in Australian supermarket shelves. It also agreed to buy Malaysian soft drink maker Permanis. Charlie’s fell 2.3% to 43 cents on the NZX Friday, said Scoop.

Charlie’s Group Limited is a New Zealand owned company listed on the New Zealand Stock Exchange. It is a significant player in the New Zealand & Australian beverage markets, and increasingly in South East Asia.

The company manufactures and markets a range of premium ‘not from concentrate’ and organic beverages and distributes to a wide range of well known outlets internationally.

The business was established in 1999 and floated on the New Zealand Stock Exchange in July 2005. In December 2005, the company bought and integrated the Phoenix Organics Group into its business.

Its principal brands Charlie’s and Phoenix Organics are household names. Charlie’s is a brand recognized for its delivery of honest drinks made using natural ingredients without the use of juice concentrates.

Established in 1986, Phoenix is the market leader in organic beverages. A recent addition to the brand portfolio is Juicy Lucy, a chilled juice brand sold in supermarkets and to the foodservice industry.  Charlie’s Group Limited’s shares trade under the ticker code of CHA.

Asahi had 2010 total gross sales of $21.9 million, up 29% from $16.8 million.  The company’s net revenue peaked at $17.1 million, up 24% from $13.8 million.

The Offer remains conditional, including upon Asahi obtaining all consents required under the Overseas Investment Act 2005 and the Overseas Investment Regulations 2005 for Asahi to complete the acquisition of the Charlie’s shares under the Offer.

Asahi encouraged Charlie’s shareholders to accept the Offer as soon as possible. The Offer will close for acceptance at midnight on 19 August 2011, unless extended by Asahi in accordance with the Takeovers Code.

On Monday 4 July 2011, Asahi Group Holdings Ltd announced that, through its New Zealand subsidiary, it had made a takeover offer for 100% of the issued share capital of Charlie’s Group Limited for NZ$0.44 per share in cash.

The acquisition of Charlie’s will further strengthen Asahi’s overseas beverages business and provide an entry into the New Zealand market. In tandem with Asahi’s existing operations in Australia, through Schweppes Australia, this will help consolidate its platform for future growth in the Asia Pacific region.

The acquisition was conditional upon the receipt of acceptances for 90% or more of the Charlie’s shares (or, if the 90% condition is waived by Asahi, at its discretion, receipt of acceptances for more than 50% of the Charlie’s Shares.

Under Asahi’s long-term vision, Asahi aims to increase its sales to 2–2.5 trillion Yen, increase its share of overseas sales to 20-30% and join the ranks of the top global food companies in scale, while becoming a trusted company with global quality by 2015.

Asahi intends to drive growth in its existing businesses as well as expand its overseas investment activities to achieve further synergies.

Through the acquisition of Charlie’s, Asahi will establish a position within the New Zealand beverage market. Post acquisition, Asahi intends to continue to operate Charlie’s as a standalone business. Charlie’s is a highly innovative company, with a unique portfolio of premium brands, and this acquisition would provide Asahi with a sound platform for growth in the region.

Charlie’s employs approximately 78 employees across two manufacturing sites – one in Henderson in New Zealand and another in Renmark, South Australia.

Wilbur-Ellis has a strong position in the feed ingredient market in the U.S. with decades of experience featuring a network of marketing offices, production facilities and key customer and supplier relationships.

The company has been a buyer of feed ingredients, building strong supplier relationships with companies in Australia and New Zealand, including NZAPFI, since the early 1990s.

Ron Salter, president of the Feed Division at Wilbur-Ellis, said the firm is looking to expand its reach as it becomes a full-service provider of pet food ingredients.

Salter noted that Wilbur-Ellis already had a productive marketing relationship with NZAPFI for over three years, and this transition is something that both companies are looking forward to.

According to Andy Chance, one of the owners of NZAPFI, the firm felt it was time to move the business forward for more growth opportunities. Chance noted that with Wilbur-Ellis’ leadership, experience and global footprint, NZAPFI is confident that taking advantage of these opportunities now will bring much success to the business in the future.

NZAPFI was founded in 2007 by Andy Chance and Murray Swanson when they purchased the facilities from Proctor & Gamble. Post the acquisition, the owners will continue to play a key role in managing and growing the business.

Bill Standeven, feed marketing segment manager for Wilbur-Ellis, and Rob Fullerton, feed marketing senior sales manager will also play key roles in overseeing the transition of ownership as well as managing the business moving forward. There are currently facilities in Bluff and Palmerston North, New Zealand. All locations were included in the purchase.

Established in 1921, Wilbur-Ellis is an international marketer and distributor of agricultural products, animal feed and specialty chemicals and ingredients. By developing strong relationships, strategic market investments and the ability to capitalize on new opportunities, Wilbur-Ellis has grown to become a $2.5 billion business.

The company’s ability to expand both organically and through strategic acquisitions continues. The Feed Division restructures, focusing on three lines of business: marketing, forage and animal nutrition. The Agribusiness Division expansion elevates it to national standing among distribution companies. The Connell Brothers Division becomes a leading international marketer and distributor of specialty chemicals and ingredients.

Wallace Corporation will retain its rendering, tanning, farming and casualty stock collection business at Waitoa. Silver Fern Farms’ Te Aroha plant was seriously damaged by fire in December 2010 and has been out of operation since then. Silver Fern Farms Chief Executive, Keith Cooper, said that the company’s intention to rebuild the facility would be welcome news for the Te Aroha community.

Mr Cooper said the company planned to make a significant investment in the new Te Aroha facility subject to obtaining the necessary approvals. Designed in consultation with internationally recognized experts in process layout and ergonomics and incorporating the latest technologies, including sophisticated traceability and yield collection systems, the plant will reflect the company’s focus on plant economics and best practice processing.

Mr Cooper said the new design has been developed with eco-efficiency and sustainability in mind and will set a new industry benchmark in line with global customer requirements.

Once the green light is given the company expects construction to take approximately 9 months. Mr Cooper said that the opportunity to acquire Wallace Meats had emerged during the course of the company’s due diligence to identify the best solution to service farmer-suppliers’ needs in the broader Waikato area and at the same time contribute to industry aggregation.

Wallace Corporation Chief Executive Graham Shortland said the company has been planning significant investments in environmental initiatives such as waste to energy and new infrastructure at its Waitoa site.

Silver Fern Farms is New Zealand’s major marketer and processor of lamb, mutton, beef, venison and associated products to more than 60 countries. The company’s vision is to be a fully integrated market focused company investing in consumer products that will differentiate and add value to its farmer partners, customers and people.

Silver Fern Farms is a farmer controlled cooperative with 18,000 farmer shareholders. The company operates 20 processing facilities throughout the country, employing more than 7,000 staff in the peak season. Key markets in North America, the United Kingdom and Europe, Asia and the Middle East are supported through a network of international offices.

Wallace Corporation is a privately owned company is a diversified agri-processor with an annual turnover of around $200 million.

Affco Holding told its shareholders it had agreed on a binder by Talley’s Group for the unconditional offer. The unconditional offer now means all of Affco Holding’s shareholders will be paid within seven days, after Hugh Green Group accepted Talley’s offer. Talley’s said Tuesday it had attained acceptances of nearly 85 per cent after the deadline on the offer expired Monday.

In a statement, Affco Holding said the existing offer provides price certainty within the range that an independent advisor found to be fair market value in the circumstances that, given the high rate of acceptance under the offer suggest a major deterioration in liquidity in the foreseeable future. With that in mind, the independent directors now recommend all shareholders accept the takeover offer, added the statement.

Talley’s Group is involved in a variety of businesses that span the frozen vegetable to seafood and ice cream markets. As it stands, Talley’s Group already had a controlling stake of Affco Holding through a 53 per cent ownership of the stock and had signed an agreement for the purchase of 23.5 per cent held by the Spencer family’s Toocooya Nominees. Talley’s Group’s offer price was in the range of the 34 cents to 44.4 cents independent valuation of Affco.

However, Talley’s did not offer a premium to take over the remaining shares of Affco Holding. Affco Holding shares retailed at the offer price in the days prior to the Talley’s Group offer, settling at a high of 61 cents as of August 2008. The complete takeover offer came as a result of the initial move to purchase Toocooya’s stake in Affco. Subsequently, Talley’s Group made a move for the complete takeover of the firm.

Affco Holding is New Zealand’s fourth biggest meat processor and exporter. The firm was begun over a century ago and has existing operations in nine plants in the North Island and two plants in the South Island. Affco Holding owns 35 per cent of Open Country Dairy, an independent dairy processor that buys regulated raw milk from Fonterra Cooperative Group, while Talley’s is the third biggest shareholder with about 17 per cent.

The Reynolds Packaging (NZ) Ltd is a New Zealand firm owned by Graeme Hart, owner of the RGHL and New Zealand’s wealthiest man. The acquisition will be undertaken for a consideration of US$300 million subject to changes in certain situations. According to Reynolds Group Holdings Ltd, the acquisition will be financed with its cash reserves.

Graeme’s RGHL is one of the foremost global makers and suppliers of consumer food and beverage packaging. It also runs storage products and is operated via four primary segments namely SIG, Evergreen, Reynolds Consumer and Closure Systems International. Reynolds Group announced last month that it will buy Hefty bag maker Pactiv for $4.4 billion.

Including debt, the acquisition is valued at around $6 billion. It’s the latest and biggest in a string of deals that has built Reynolds parent company Rank Group Ltd into a worldwide packaging empire under owner Hart Graeme.

Reynolds Group Holdings is an American packaging company with its roots in the Reynolds Metals Company, the second largest aluminum company in the United States, and the third largest in the world. Headquartered for most of its existence in Richmond, Virginia, it was acquired by Alcoa in June 2000.

Alcoa’s consumer unit was acquired by Graeme Hart, the New Zealand businessman in 2008 who renamed it Reynolds Packaging Group. Hart’s other packaging holding were merged into Reynolds to create the present Reynolds Group Holdings.

On its part, the Reynolds Flexible Packaging is an industry leader in the production and conversion of flexible packaging, including laminated and multi-layered substrates and plastic shrink film. Its facilities produce a wide array of products that are used by leading consumer product manufacturers.

Its major products manufactured at its global facilities include printed, laminated light gauge foils that add color and protection to food and consumer product packaging. Other than that, the firm also makes laminated and printed pouch rollstock for healthcare products such as alcohol towelettes, tablets and transdermal patches; tamper-resistant and other types of laminated foil backings for pharmaceutical packages foil and film lidding for easy-open food and healthcare products containers.

The firm was put under receivership in November last year by the Australia ANZ National Bank after it was unable to pay the bank about $46 million that it owed it, and a further $4.7 million that it owed to unsecured creditors. However, Cedenco Foods Ltd was allowed to continue trading as the ANZ National Bank sought a potential buyer. With the placement of the New Zealand arm of Cedenco Foods Ltd under receivership, came the placement of its Australian arms, SK Affiliates, Cedenco JV Australian and SS Farms Australia under receivership as well.

According to estimates, the Australian arms of Cedenco Foods owe it about $11 million. Even as the investment by the Japanese firm is authorized by the Overseas Investment Office, the financial details of the transaction remain under tight wraps. Liquidators reiterated that there can be no telling just how much out of the amount involved in the transaction will be availed to Cedenco Foods’ unsecured creditors.

The Japanese firm, CDC Foods Ltd is controlled by Imanaka, a Japanese importer and exporter of food, housing and chemical products. The Australian deal will see the firm continue operating Cedenco Foods Ltd businesses and no indication was given of a staff change. When Cedenco was put under receivership, its US arm New Zealand and Australia businesses were owned by a Salyer family trust that had acquired them in 2003. On its part, US Cedenco businesses unit, SK Foods, has attracted lots of attention from the controversy that has trailed it this year.

Firstly there was the arrest of its former chief executive officer, Fredrick Scott Salyer in the US over allegations of racketeering and corruption. The racketeering and corruption charges were linked to a move by Salyer in which he planned to invalidate competition of his tomato processing firm and sell SK Foods’ tomato products at overblown prices.

Cedenco Foods is a leading New Zealand based food company supplying domestic and international customers with a diversified range of added-value agricultural food products.  Cedenco products include fruit and vegetable powders, purees, pastes, retorted and frozen vegetables.