buy nz made - before it's all gone

I had a chance to speak to a local manufacturer today who sells into both Australian and New Zealand supermarket chains. His experience of late has confirmed what many had fared about the buyout of Progressive Enterprises by Woolworths Australia - that NZ based suppliers are fucked. In an environment where the price grocery retailers pay for their goods have remained relatively static, suppliers here are now forced to match terms with Australian products or lose access to supermarket shelves. In theory, there's opportunity for NZ suppliers to gain access to Australia, but the reality is that the margins they get from NZ supermarkets is low, and a lack of cashflow for the smaller suppliers to invest in equipment to be able to ramp their output serving four million people to output serving six times that number makes quick expansion impossible. The same lack of liquidity prevents manufacturers from acquiring horizontally - meaning business that are in trouble simply disappear, rather than being bought by another NZ operation.

All the while, the Woolworth's Australia has made a very nice profit, reporting in the latest half year that
- EBIT was up by 31.5% to $A902.4 million.
- Supermarket (Oz&NZ) sales up $A2.4 billion to $A16 billion.
- NZ Supermarket sales up 4.3%
- Food inflation was 1.5-2%

The cost of doing business was also down (read: squeezing suppliers), with

80% of these cost savings were reinvested in gross margin with the balance going to increase EBIT margin.

(PDF here)

So we - the consumer - is left with little choice in what we buy, even if we are swayed by the Green's Buy NZ Made Campaign. It's starting already - you may have noticed your favorite Basics product replaced with the Oz made home brand. Little wonder we're flocking to Australia, pretty soon we'll be left without any food.

down the line

So Telecom is planning to dance with the regulators, which on the face of it is good news. But it probably wont be. This is the same Telecom that has defied regulators in the past. It's the same Telecom that misrepresents its services (are you paying less for Telecom broadband?). Don't hold your breath on this one. Yes, they have promised transparency within it's operations. And they've promised a level playing field. But Telecom can and will find ways to confuse. Price gouging on mobile-land packages are an obvious risk. We really do need a proper new business to operate Telecom's wholesale business, including wireless.

bad with the good

It's only fair, if I'm slagging someone off, to point out when things get better. It wasn't long ago in the fair suburb of Mt Eden, when Telecom's DSL service was extremely oversubscribed - leaving us serfs with seriously lacking broadband. But now, I feel like I'm actually getting bang for my buck - large downloads clocking in at over 180kbs. Sure, I'm not getting the 3mbs Telecom insists is theoretically possible and, fine, it slows down my browsing, but I'm much happier now with my download speed than I was before. If only they'd get rid of those nasty download caps.

Meanwhile, I've had a chance to have a play with Google Spreadsheets properly. They haven't, as hyped, got it all down - no charts, macros or anything Excel has in the Data menu. But it works fine enough - and considering it's still a 'labs' project, it's sure to add all the whistles and bells soon enough. They've got rid of the limited trial too, it seems - only needing a google account to sign up.

gale force fraud

The US Federal Emergency Management Agency has paid over $US1 billion in fraudulent claims. It's unbelievable how low some people will sink, and little wonder New Orleans hasn't got back on its feet at a faster pace. Shame on the fraudsters, shame on FEMA.

good news everybody

Finally, an announcement on Digital TV. Which is good news, a workable model that ensures we don't fall behind the world in broadcast television. Freeview, the platform name of the service, will be delivered to our homes via satellite and/or terrestrial transmission. We will need a set top box, however - but on the plus side, up to 18 channels!

Nat MP Georgina te Heuheu couldn't resist a moan though, blasting the government for not providing details such as how much the set top box will cost or how much taxpayer money will go into the service. Which are good questions, just a shame that the government answered them an hour before te Heuheu asked. The cost to customers is approx $200 and the maximum taxpayers will pay is $25 million. Sure, Broadcasting Minister Steve Mahery didn't give the exact retail price - but it's still a year off, and one would expect the government to thoroughly explore different suppliers of set top boxes to get the best price and features before setting the retail cost.

The government released a FAQ around Freeview which does into more detail, while the Greens had warnings about the dilution of NZ content.

easter trading

In his post on Easter trading hours, DPF suggested removing all trading hours upon retailers, above and beyond two private member's bills to allow Easter Trading for tourist towns- one from Labour's Steve Chadwick the other from National's Jacqui Dean. The law, as it currently stands, allows only essential services and garden centres to open on Good Friday and Easter Sunday, and essential services only on Anzac Day and Christmas Day.

Nobody cares about not bing able to trade Christmas Day, nobody would turn up to buy anything. On Anzac Day shoppers simply delay their dollars to later in the afternoon, besides it's the only one of these holidays that has firm roots in NZ - allowing trading is a risky move politically.

But everyone is on holiday over Easter. It's generally fair weather, and people are off work for 4 days desperate to do things. Retailers want to cash in - and fair enough. The only problem is that Easter Sunday isn't a public holiday. Nobody's entitled to time-and-a-half. No day in lieu if you work on Easter Sunday. Employers - some garden centres are an example - may choose to give these benefits.

The options for the government are:
- The status quo
- Allow trade on Easter Sunday, making it like an ordinary Sunday. This would upset a lot of Retail workers, missing a day off.
- Allow trade on Easter Sunday and make it a public holiday.

The problem with the latter options is that it adds a public holiday that most worker's won't get. It could be a public holiday for all, with it transferring to Tuesday if you don't work on Sunday - but most employers wont be keen on that.

Whatever the outcome - the nobody-works-on-Sunday hangover we have in our legislation is outdated and needs to reflect the real world. It also needs to reward workers with time off for working over 4 day weekend - meaning time and a half and a day in lieu for Easter Sunday.

(Updated: 15 Oct 06(!). Links to DPF and Shop Trading Hours Act corrected)

to be in the city

As always, something that went wrong in Auckland was blamed on the RMA, which as the PM points out isn't fair. It's also not fair to place incredibly large power pylons near peoples homes, no matter how rich they are. I live nowhere near South Auckland, but every time I drive along the southern motorway, I see the massive plylons flanking residential houses and - after I'm over the shock of their ugliness - wonder about cancer rates in those areas, and others near pylons and substations. I agree that we need to spend money, but let's not blame the RMA on doing what it was supposed to do - protect the citizens of this country from harm. I'm sure if the government was to decide the quickest and cheapest way to ensure power supply into Auckland's CBD was to plonk 100KV lines through Remuera, those braying over the last few day's wouldn't be happy.

Though all of this, I had the misfortune to both be subject to diving without traffic lights, and a full days work - the power was still on in the North Shore. Relief, however, came when the generators went down at the company that hosts all of our data (that is, public drives and network applications reliant on databases) , there was nothing to do but surf the net, despite DSL being down in parts of the city with power.

shopping nightmare

I've decided to stay well away from Sylvia Park this weekend - preferring hell to be involved chaos similar to Thursday's opening. Picked up a few stories from people working there on the day, including hair pulling, fisticuffs and people stealing hot deals from other customer's trolleys. And that was all before the $49 TV's sold out 7 minutes after opening the doors. Even more bizarre than Nat MP Maurice Williamson blaming the traffic chaos on Labour, was a very senior Progressive Enterprises (Owner of Foodtown) employee vandalising a display in the front of the Warehouse and having to be calmed down by Warehouse founder Steven Tindall. Foodtown, apparently, wasn't doing very well during the morning in comparison to the Warehouse.

employment relations

In the last few days there has been a solid push against current employment law from the right. The Herald Wednesday lead with a Tauranga employer feeling aggrieved at a Employment Relations Authority decision against him, alongside a Employers & Manufactures Association (EMA) survey reporting that employment grievances are on the rise. The article gave Nat MP Wayne Mapp a chance to plug his 90-day worker probation bill (currently before Parliament), endorsed by the EMA in it's press release

The figures add solid support for the type of probationary period of employment currently before Parliament.

$2400 is a lot of money to have to shell out, especially considering the sacked worker Daniel Paterson wasn't a very good employee. But, he wasn't fired for anything the Herald implied with the headline

$2400 worker's payout for filthy graffiti.

He was fired for being late. Specifically, he was fired for being late once. Paterson was probably tardy more than that, but his boss Bruce Debenham didn't give Paterson adequate notice that he was close to being dismissed. On Thursday, he admitted that he did things badly in the Herald.

Further whining from the EMA here, claiming Labour's 2004 employment law amendment is unfair because New Zealand has more than one Judge deciding on employment matters. Sorry? That logic wouldn't get far in a murder case. This case involved a Air New Zealand Employee who was given warnings in 2002 and 2003, once for a fracas with another staff member, another time for getting snotty with customers (details of which Air NZ was unable to provide). Then she was given a promotion. Then she was fired 14 months after her last warning (PDF, page 61). The Employment Relations Authority(ERA) decision was appealed to the Employment Court by Air New Zealand The reason the EMA was upset was because presiding Judge Coral Shaw reaffirmed the ERA's assertion that Air New Zealand's actions were

not what a fair and reasonable employer would have done in the circumstances

I don't think it's too much to expect that of employers, and if the opposite - unfair and unreasonable - was to be committed to policy, it'd be laughed down.

There are some truly shocking workers out there, and most of them get moved on quickly by savvy employers. It's not hard to get rid of a truly bad employee, provided you put everything down on paper. Five sheets of paper to print out a customised employment agreement from the Dept of Labour, and another six to warn and fire the employee. Total cost 10 cents, if you're using the posh stuff.

That, and being fair.

google takes aim

Google has 'made available' to the public it's answer to Microsoft Excel, Google Spreadsheets. judging from the screenshots, and news from the unofficial Google Blog, it looks like it could challenge Excel easily. If it can process macros, I'm sure they will have a complete set of formulas by the time they go alpha.

Which nearly makes a Google Office Suite complete, with mail, calendar, and word processing already in the picture. It won't take much to allow Writely to create presentations, the business world desperately needs an alternative to Powerpoint.

The major plus for all users is the price, can't get better than free, and freedom from the hassles of upgrades and add-ins, especially when sending the file to other users.

While Google now has the wherewithal to go for the jugular in the home user market, small and large enterprises may find Microsoft their only option. Technical support is one major issue, as is security. Web versions of MS Publisher and Access will be interesting at best, although challenging the under-used Infopath considering the expense to license every user could be a goer.

developers 'squeal'

Herald reporter Bernard Orsman describing property developers as 'squealing' in an article about the Auckland City Council raising development levies is apt. For a sector that strongly identifies with the right to argue against a form of user pays is an example of their self serving nature and disregard for the consequences of their actions. The council has responsible outlined $280 million of new spending needed as a result of increased development, and is asking developers for $24 million of that, which falls well short of the impact they cause. They should be responsible for a much larger share of the impact they cause. $950 in costs against the sale price of a house/apartment isn't particularly significant. The Greens want to take it further, increasing the levy and providing discount incentives for solar panels and rainwater collection systems.

The developers don't have a leg to stand on. If their developments and future developments are to succeed, they not only bare responsibility for some of the costs, they will benefit from the public investment into infrastructure from an increased standard in living the buyers of their developments will receive.

new enterprise

The Government's decision to encourage new business activity from SOEs drew a decidedly knee-jerk reaction from ACT leader Rodney Hide, who labeled the move a tragedy. Predictably tax cuts were Rodney's answer. Business NZ claimed that SOEs would muscle in on businesses areas already occupied by the private sector, citing ACC as an example. I'm not convinced that TVNZ and OnTrack are about to pose much competition to the SME's that Business NZ represents - although Paul Henry would do a roaring trade running a dairy. National's response was more measured, with John Key issuing a warning shot about cronyism, and Katherine Rich suggesting offshore activities may be more effective, which may work for NZ Post and the Energy Companies, but not for OnTrack or TVNZ. She misses the point slightly, with overseas expansion being only good for revenue gathering, rather than providing new services that New Zealanders can not access.

This is a good policy provided that new areas meet the stated objective of having

a demonstrated potential to enhance the competitive competencies of other firms and industries.

Which may not go far enough. For this to work, SOEs need to have profit and dividend objectives clarified - the state shouldn't enter into areas that the private sector can provide at a high quality. SOEs now need the flexibility to utilize their profits from some areas to provide new services that run close to breaking even (i.e. unpalatable for private enterprise). As the TVNZ charter has proved, running dual model businesses are tough. If and when SOEs come up with new areas to provide public or business-to-business services, the SOE's board should be obliged to present a new business model that provides a structure to cope with a different style of operation. The government will in term need to accept no/low dividends.

I can't foresee what these companies will come up with, but if done properly they can provide enormous benefit, not only in direct job creating, but in improving the productivity for the NZ business community.

trouble in the suburbs

I've always regarded Howick and Pakuranga as oddities compared to the rest of Manakau city, given its relative wealth and different ethnic mix. City councilor for Howick Sharon Stewart seems to think so too, along with many of her constituents, pushing for transparency around the rate take from each ward. With the council instituting confusing and bizarre changes to it's revenue gathering, as well as proposing an increase, the citizen's in the east are feeling that they're unfairly propping up other areas of the city community.

They may well be paying more, but any rates breakdown is meaningless without comparison to ward spending breakdowns and civic infrastructure spending figures. Cr Stewart and her supporters on the council need to tread carefully in this area, especially given the Councils desire to boost revenue. City rates must be uniformly applied to all wards, even if some areas pay proportionally more than others for the benefit of all. Equally the city's bureaucracy has to make sure any planned increases are done with full consultation, and without dramatic changes to individual ratepayers.

sylvia nearly here

On Thursday, Stage 1 Sylvia Park opens to the public. It will be, most likely, the most exciting thing to happen in NZ retail this decade (for retailers at least). While it may be eclipsed in size by future developments, it's scope and location will make it a winner, at least in the long run.

In the lead-up to the grand opening, retailers will be finialising the setup of their store interiors, and the developers will be rushing to complete the internal roads and carparks. With the next stages still under construction, shopping at Sylvia may be a bit of a chore for a while. Expect dust on your car until it's finished.

There's no doubt we'll be spending more and more time in malls, which hopefully won't lead to the death of current suburbs of character. I'd be a shame to wake up one day, suddenly realising that Kingsland has turned into Albany. I'm still looking forward to seeing the doors open at Sylvia.

In related rants, my local supermarket has decided to move all their wines into new fangled fridges. Which is fine, they needed more space for the chilled beer and wine. But they've messed it up completely. Firstly, they're horrible fridges with doors, so I see more fridge than I do wine. Secondly they've laid out the fridges by supplier - judging by the Montana logo, Pernod Ricard (NZ's largest wine supplier) has paid for the fridges.

This is wrong on many levels.
1. I don't shop for wine by supplier. The fact I happen to know who supplies what wine in the NZ marketplace is, frankly, an odd thing for a person to know. I'd imagine most don't. I - and everyone else - shops by the type of grape it was made with. Now I have a hell of a time finding a Sauv Blanc I want.
2. They've profiled sparkling in between the still wines. That's just stupid. Plus, they've given Lindauer prime position, so unless Pernod is going to ignore the Commerce Commission, they have given the best space to a future competitor.
3. The space on the shelf doesn't belong to suppliers, it belongs to me - the customer.

So, grow come balls Foodtown, and give your space back to the customer. And grow up Pernod, you'll sell more if you make it easier for me to shop.

rejecting the premise

New Telecom board chairman, Wayne Boyd, was interviewed by Michael Wilson on ASB Business this morning. Throughout the entire interview Boyd employed a tactic of not accepting the premise of the interviewers question, instead responding with answers that suited him. This is a bad move on two accounts:

1 - Boyd isn't a seasoned interviewee, so in rejecting the premise of each of Wilson's questions, he failed to address anything that seemed remotely relevant.
2- For a company desperately needing to win back the trust of its customers, Boyd's tactic came off as evasive.

Wilson isn't an aggressive interviewer, preferring to ask questions in a conversational matter (which suits ASB Business well), but he was clearly frustrated and confused by Boyds answers, as his guests usually respond well to his interviews.

It seems confusion may see a comeback as a PR tool for Telecom

making auckland more expensive

The Residential Tenancies Act of 2004 doesn't exist. It should. It was going to happen. But it didn't. For whatever reason, the government isn't interested in passing their own laws. Which is why the Auckland Property Investors Association is calling for all landlords to force tenants to foot the entire Metrowater bill. If the Residential Tenancies Bill, introduced in 2001, has been passed this wouldn't happen.

This was made possible by a 2003 ruling allowing landlords to charge for wastewater, along with standard water.

I don't believe that the District Court Ruling was actually good law. Neither was the 1986 act, although legislators of the time couldn't have foreseen the current situation. The case law is on shaky grounds mainly because the legislation specifically enables

water provided to the premises on the basis of metered usage

which, by logic, excludes water leaving the premises on estimated (unmetered) outflow (non-use). But Judge Graham Hubble chose to allow a specific landlord to charge wastewater to his tenant.

The Association isn't being fair either. Despite the 2003 ruling, landlords can't force tenants to pay the whole bill. There are parts of the bill that are clearly the landlords responsibility, namely charges related to pipe maintenance for the Auckland area. While these are charged (erroneously) according to the amount of water used, it's doesn't count as 'water'. Landlords can't force tenants to pay the annual account charge either - although if Metrowater decided to charge separately for meter reading, tenants could be charged for that.

Labour desperately needs to sort this out. It isn't a sexy issue, and it isn't a populist one, but it does affect many people financially in their core constituency, including those on the lowest wages.

Metrowater also needs to sort it's own house out. It can't continue with dubious wastewater meterage, and it can't justify pipe upkeep against m3 used.

[update: it seems that the whole act is up for review, most likely leading to an entire rewrite of the act. An announcement about the review is expect later this year. Which means that tennants are likely to have to put up with three or four more years of harassment by landlords over water rates, that is if Labour wins the next election. Not good enough]