China is now the country's largest trading partner with
New Zealand's provision of milk to its masses, but
niche-market exports of wine, paua and crayfish remain
multimillion-dollar export earners. Senior business reporter
Simon Hartley looks at the potential effects of the Chinese
economy's austerity drive on southern exports of wine, paua
and crayfish - the latter worth more than $220 million a
The Chinese Government's widespread crackdown on extravagant
spending may yet have a downside for exports of Southern
luxuries, from the wine industry to paua and live crayfish
Chinese President Xi Jinping's austerity programme of more
than a year, a nationwide campaign targeting extravagance and
corruption, has been widely reported in Asia's media. There
have been headlines about major downturns in luxury item
sales, the curtailment of travel and the emptying of upmarket
hotels and restaurants, especially by government and military
Chinese Government researchers had claimed in early 2012,
banqueting and entertainment in China was estimated at
between $US50 billion ($NZ57.3 billion) and $US145 billion,
sparking the austerity programme.
New Zealand paua, crayfish and wines are near the top of the
Asian menu chain and command eye-watering prices at times.
It appears the austerity effects are only just beginning to
be felt by those New Zealand exporters, amid the downturn in
sales of luxury cars and watches, wedding banquets,
conferences and government meetings.
Central Otago-based New Zealand Winegrowers Association
chairman Steve Green said in recent months he had seen a 20%
national decline in sales to China - a top-five export
''We're seeing a [Chinese] reluctance to purchase luxury
goods. But we're taking a long-term view that this is
cyclical, and will change,'' he said, when contacted.
Reuters has reported on official Chinese Government spending.
The Central Commission for Discipline Inspection said money
spent on meetings, official overseas trips and vehicle
purchases fell by about 53%, 39% and 10% respectively in
2013, from 2012.
The Beijing Daily and Beijing Times reported the city's 27
top hotels were absent from a list of 318 designated venues
drawn up by the municipal procurement department for the
2014-15 fiscal year.
Mr Green said China, in the top five destinations for New
Zealand wine exports, was behind Australia, the United
Kingdom and United States, but ahead of Canada.
''They have gone from almost zero [exports] to being an
important market,'' he said.
Statistics New Zealand (SNZ) said beverage exports in the
decade to 2012 had more than tripled, to reach $1.5 billion.
Most of the $1.1 billion increase had come from wine exports,
which rose by $942 million.
In recent months, the world's two largest distillers had
noted a significant decline in sales to China. The United
Kingdom-listed Diageo saw a 40% sales slump in baijiu, a
clear grain spirit popular in China, while Pernod Ricard
expected to book a decline in whisky sales, following several
years of surging growth, the Financial Times reported.
Mr Green was asked about the effect on sales of the high-end,
niche-market Central Otago pinot noir, which makes up less
than 5% of New Zealand wine exports.
He said it was too early to accurately say how the southern
pinot noir would be affected. He understood it was the
Bordeaux-style wines of Hawkes Bay and around Auckland which
had been hit hardest by decline in Chinese demand.
Paua Industry Council chief executive officer Jeremy Cooper
said while exporting at present was ''slower'', the waning of
peak periods of paua sales, during the Chinese New Year and
national China day, were being replaced by increased domestic
sales in China.
''There's a huge increase in abalone being eaten in China,
being fed by the aquaculture [industry] which is cheaper and
smaller [size abalone],'' Mr Cooper said when contacted.
Statistics New Zealand data showed mollusc exports - paua and
mussels - were up 86%, from $17 million to $32 million, from
2007 to 2012.
''By itself, China accounted for more than one-fifth of [New
Zealand's total] fish and fish preparations exports for the
2012 calendar year,'' SNZ said.
Mr Cooper said any decline in the amount of paua usually
consumed in larger banquets was being taken up by expanding
retail sales to consumers.
''There's a big middle-class which is becoming more
affluent,'' he said.
Dunedin-based commercial paua fisherman Ross Newton has about
50 tonnes of leased quota to gather between Oamaru, Stewart
Island and up to Milford Sound in Fiordland, ''The big thing
is China's austerity [drive].
''It's affecting us in a big way. It has been stop-start to
the season. We've been relying [on sales to] Singapore and
Hong Kong,'' he said.
Mr Newton emphasised the commercial divers were at the start
of the supply chain, and had nothing to do with the
processing and marketing of paua for export.
Paua prices per kg of meat last year were $60 to $70, and
prices were at similar levels at present, but he understood
some fishers were offering from $50-60kg per kg.
Mr Newton, paua fishing since 1987, said one previous season
he held quota for up to 120 tonnes. But quota had been cut
back and commercial gatherers had imposed their own size
limits, voluntarily taking larger paua than the recreational
125mm minimum length, and seeding paua beds around the east
and West Coast.
Several seasons ago paua had fetched up to $115 a kg, but the
recent strong New Zealand dollar had since also undermined
He understood large numbers of restaurants in China had
closed because of the austerity drive.
Mr Cooper said while China was the destination for 95% of
paua exports, Chinese populations elsewhere in the world,
such as Vancouver, were also important markets.
He said a total 1056 tonnes of paua (green weight with shell)
was taken annually by all commercial operations, with little
annual fluctuation. The 40% meat content was mainly canned,
and even the 5% to 10% paua exported chilled was eventually
canned at its destination.
The strength of the New Zealand dollar was also a headache
for the industry. Mr Cooper estimated profit margins were
down 20%-30% because of the exchange rate with the US dollar.
While able to speak only regarding ''getting paua to the
beach'', as opposed to its processing and marketing, Mr
Cooper said the annual take of paua for export rarely varied.
Similarly, the crayfish export tonnage this year was expected
to be similar to last year, as are expectations of demand and
pricing; albeit also hit by the strong kiwi.
SNZ data said from 2007 to 2012, lobster exports grew 84%,
from $121 million to $223 million, while for the same period
overall seafood exports were up by 26%, from $1.25 billion in
2007 to $1.57 billion in 2012.
China as an export destination took the lion's share. Total
New Zealand seafood exports were up more than 200%, from $117
million in 2007 to $353 million in 2012.
In 2012, those exports receipts were headed by rock lobster
(crayfish, $223 million), followed by mussels ($207 million),
hoki ($187 million), squid ($86 million), jack mackerel ($64
million) and salmon ($52 million).
''The value of rock lobster [crayfish] exports also increased
significantly ... as a result of increases in both volume and
price,'' SNZ said of the 2012 figure.
The Fiordland Lobster Company is the country's largest live
crayfish exporter. Chief executive Alan Buckner was bullish
about prospects for the season, which began on April 1.
He said there was not yet any sign in the lobster sector of
falling demand because of the Chinese austerity programme.
''Our expectation is that the demand this year will be
comparable to last year. It's the year of the horse in China,
which is a good year for weddings, and this should assist in
driving demand,'' he said.
Mr Buckner is in China this week, visiting major customers in
Shanghai, Shenzhen and Hong Kong. China takes the majority of
Fiordland Lobster's live crayfish, but it also exports to
Hong Kong, Japan, Singapore and the United Arab Emirates.
SNZ data said China was now the main player in New Zealand's
export ''fish and fish preparations'' market, its value
doubling during the five years to 2012.
''Rising Chinese demand for crustaceans, mainly rock lobster,
frozen fish and molluscs [including paua] heavily influenced
the increase,'' SNZ said.
From 2007 to 2012, crayfish tonnage for export increased
12.5%, from 2.4 million tonnes to 2.7 million tonnes.
Mr Buckner said it was still too early to assess the start of
the season, but based on last season's catch history, the
industry was confident the fishery should perform as well as
it has during the past two seasons.
''The market demand is always relatively light in early April
due to the Qingming festival, also known as tomb sweeping
day,'' Mr Buckner said.
Mr Buckner said last season the price ''on occasions''
reached $100 per kg, at the high demand periods, such as
China's national day in October, and the Chinese New Year. It
had hit $100 per kg in 2009, but waned after that.
''Our expectation is that the volume we export from New
Zealand this year will be comparable to last year,'' Mr
While the strength of the New Zealand dollar was having a
negative effect on all New Zealand exporters, Mr Buckner said
the strong Chinese demand for lobster was offsetting some of
that problem for the lobster industry.
Seafood and beverages to China
• From 2007 to 2012 - overall NZ seafood exports were up by
26%, from $1.25 billion in 2007 to $1.57 billion in
• China is NZ's largest seafood market, with 2013 exports up
19% to $376 million.
• From 2007 to 2012 - total NZ seafood exports were up more
than 200%, from $117 million in 2007 to $353 million in
• Over two decades, total seafood sales to China grew from
$500 million to $1.5 billion.
• From 2007 to 2012 - mollusc exports, paua and mussels, were
up 86%, from $17 million to $32 million.
• Crayfish - $223 million value in export receipts for 2012,
compared to: mussels, at $207 million, hoki, $187 million,
squid, $86 million, jack mackerel, $64 million and salmon,
• From 2007 to 2012 - crayfish tonnage for export increased
12.5%, from 2.4 million tonnes to 2.7 million tonnes.
• From 2007 to 2012 - crayfish exports grew 84%, from $121
million to $223 million.
• NZ's overall beverage exports in the decade to 2012 had
more than tripled, to reach $1.5 billion, with most of the
$1.1 billion increase coming from wine exports, which rose by
SOURCE: STATISTICS NEW ZEALAND