Hon Dr Lockwood Smith MP National Party Trade Spokesman

17 April 2003

Clark's bungle puts milk powder exports at risk

Helen Clark's diplomatic bungling on Iraq may hit New Zealand's economy much quicker than many expected, according to National Party Trade Spokesman Dr Lockwood Smith. "Fonterra has already acknowledged publicly that it has been heavily involved in the UN Oil for Food Programme, selling as much as 80,000 tonnes of whole milk power in one year through the programme.

"It's my understanding that over the next two years Fonterra was expecting deliver 100,000 tonnes of whole milk powder through re-packers in South East Asia and the Middle East.

"They're export earnings worth more than $300 million," Dr Smith says.

"But now all of it must be at risk following a US announcement.

"America now says it plans to put 100,000 tonnes of skim milk powder into Iraq by way of aid.

"That's bound to put Fonterra's business and that $300 million worth of exports in jeopardy," Dr Smith says.

"Now, as the Kiwi company seeks to tell the US about the impact their food aid programme will have on Fonterra's global marketing, Helen Clark's whole handling of Iraq won't be helpful.

"The US has more than half a million tonnes of surplus skim milk powder in store," says Dr Smith.

"Given Helen Clark's attitude to the war and the insults aimed at President Bush, it's hard to see why the US should be too concerned about displacing $300 million worth of New Zealand business.

"You can be just as sure that won't be where the damage ends, New Zealand business will continue to pay a heavy price for Helen Clark's mistakes," Dr Smith says. Ends

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