Both Open Country Dairy (OCD) site manager Mike Butler and South Pacific Meats plant manager Brent Crawford expressed their deep disappointment at being hit by an 80% increase in water charges in 2024-25 and were not prepared to sit quietly while this year’s annual plan proposed another increase.
They aired their frustration at Invercargill City Council hearings last week.
Both men said the 80% rise last year caught them by surprise. Nor was there any recognition of the contribution the two companies had made with a $5 million pipeline to carry trade waste back to the council’s facilities.
The increase did not appear reasonable or justifiable - especially considering the companies had funded the infrastructure, they said.
The increased fees appeared to target industry, and the companies were concerned they could drive industry out of the area.
Mr Crawford said the increases were not sustainable and would likely prohibit future development in the region.
He believed the two companies at least deserved a phone call or email from the council to inform them of the proposed increases.
Mr Butler said in 2024 council charges changed without warning from 80 cents a cubic litre to $1.80 and would increase to $2.39 in 2025 - three times the price of its sister plant in Whanganui.
Water costs for the plant skyrocketed from its $140,000 annual budget to $442,000.
"Big surprise ... now we get another increase for a proposed 31.5%"
OCD was proposing to develop a cheese plant in Southland that would employ 150 people, but the water charges were potentially prohibitive for future expansion of commercial activities in the region.
If the proposed increases over the next five years continued it would amount to a $2m difference.
"Those who make the decisions on where the plants go, look at the financials, so that definitely affects us," Mr Crawford said.
"If we can grow, we grow people, we grow jobs, we grow ratepayers - we help businesses.
"We really are at a danger here of getting knocked back pretty hard and someone else getting the business. I don’t think it’s a fair cop.
"The upward trend in the last two years is simply not sustainable for business."
It appeared industrial users were being targeted.
The company was paying the same rate as 4000 domestic users but only using a sole pipeline.
He believed the companies should only be paying about 60%.
"So we are subsidising residential.
"It does not appear fair or reasonable that industries - particularly SPM and OCD, which has supported the council with infrastructure and provides local employment - are targeted with an industry-based increase that does not consider individual circumstances."
South Pacific Meats employed more than 500 staff and operated 11 months of the year, Mr Crawford said.
Cr Grant Dermody said, when contacted, he was "disappointed and frustrated" the companies had not been notified about the increases.
"I think it was good for staff to hear the implications, particularly around the inability of them to manage the costs by way of budgeting because they were just sent a letter and told this is going to be a year-end charge," he said.
"The message I took from it was, ‘Hey, you need to work more closely with us so we can plan better’. The council wants to encourage business to invest in the South. It’s economic development - it provides jobs."
- By Toni McDonald
