WATTIES CLOSURE - WHO CARES, AND WHY WE ABSOLUTELY SHOULD

12 March 2026

Yesterday's news that Watties is poised to close several New Zealand food processing factories with the loss of 350 jobs evoked two emotions from me in quick succession - nostalgia, then anger.

Nostalgia, because I had a lot to do with Watties professionally early in my career - late 1970s and early 80s. I worked for the organisation representing Watties' growers - the Process Division of the NZ Vegetable and Produce Growers Federation ("Vegfed"). Like many primary industry groups in those days we were funded by a compulsory levy on all growers. The proceeds were used for projects for the good of the grower community - research, liaison with processing companies, and communication on issues like pests and diseases and farm management.

One task I always looked forward to was the annual round of price negotiations with the processors. Watties was by far the biggest with factories in Gisborne, Hastings, Christchurch and Timaru. Once a year a small team of us, with me as a junior member, would fly to Watties Head Office in Hastings to argue the price the company would offer farmers for its major crops - especially peas which were a massive part of Watties business, supplying the local market, Australia, and further afield.

But invariably the Watties managers would meet us with long faces. Export prices were way down, there were massive carry-over stocks from previous seasons. Competition was enormous. Their volume requirement this year would be far below usual. The very best they could manage was a repeat of last year's price. (And our case was not helped by all of us knowing that even if the price was zero, many of the growers would plant anyway because peas are very beneficial to soil recovery after years of other crops.

So we would troop back to Wellington having capitulated. The price would be signed off. Then suddenly a month later word would go around that there was a massive shortage of frozen peas in the Australian market and Watties was wanting to contract every hectare it could get. With hindsight, we were babes in arms.

But then, anger. Anger, because Watties was - and still should be - an iconic Kiwi business. It was a key part of a food chain that made New Zealand not only self-sufficient in basic foods, but a food bowl for the world. And at this time of geopolitical upheaval and extreme uncertainty, that really, really, really matters.

But where is our government? In the past a closure of this scale in what should be a core industry would have had half the cabinet involved - looking at the feasibility of rescue packages and job potential for the displaced regional workers.

But today's leaders seem to think that any business smaller than Fonterra is inconsequential and it would be beneath their dignity to show interest.

We are paying the price heavily for letting iconic Kiwi businesses like Watties fall into the hands of overseas investors concerned only with monthly profit and with no connection or empathy with New Zealand. One competitive advantage our country enjoys is in production of healthy foods - be they peaches, peas, spinach, tomato products, meat or dairy. For nearly a century Watties, mostly with local ownership, showed how to leverage that competitive advantage with enormous success. Now with international owners, suddenly all that is uneconomic.

Why?

One partial explanation on offer is the price of electricity - obviously a key input to the cost of manufacturing and storing frozen foods. That is the result of the 1990s government's failed experiment in privatising the electricity assets that had been built at the expense of every Kiwi taxpayer for decades, and transferring ownership to a small number of wealthy investors bent only on maximising profit and minimising reinvestment. The EMA is predicting more factory closures to follow for the same reason.

RIP another Kiwi business. Sorry you didn't stick around for your centenary which would have been just 4 years from now. And government - please look outwards for once and take ownership of what is clearly a problem for the communities who, in theory, you serve. With respect, your predecessors broke this market; now its time for you to fix it.

There are days when I despair.