New Zealand: Is nation over-dependent on dairy monopoly?

Reports say the recent scare of dirty pipes at dairy giant Fonterra was a stark reminder that people in New Zealand may be too dependent on the nation’s dominant milk firm worth about 10 percent of the nation’s entire economy. Fonterra announced Wednesday that it had isolated the threat, recalled the effected products and that no infants became ill; but the situation caused officials to go on high alert and in crisis mode. Prime Minister John Key even offered to fly to China for milk if necessary. According to reports, such a dependence on a single company poses a threat to a nation reliant on agriculture for its economy, despite recent efforts to strengthen new markets from filmmaking to tourism. Fonterra chief executive Theo Spierings went to China to assure that while the company’s short-term image may be bruised, he is confident its reputation will heal. But economics professor at the University of Auckland Business School Tim Hazledine said he is skeptical of such a monopoly and says competition is better for the economy. Reports say about 70 percent of New Zealand’s exports earnings are from primary products including dairy, fruit and lamb.