‘Parallel imports’ could trip Kiwi food companies

By Ankush Chibber

- Last updated on GMT

Related tags New zealand Import International trade

Kiwi food processors are up against a new menace in the practice of “parallel imports,” in which local retailers are importing cheaper overseas versions of locally made food products.

The issue came to light when Fair Go, a consumer affairs television programme, carried a report based on a consumer’s complaint, who had bought Milo from his local retailer only to find that it lacked Milo’s chocolate, malt and flavour.

Fair Go investigations discovered that this particular Milo product was in fact a parallel import, made by Nestle in the Philippines, but then imported by a retailer to New Zealand.

Fair Go also called out the product for not carrying adequate labelling under the country’s laws and also for not being distinguishable from locally made Milo even though it was made for a very different taste preferred by Filipinos.

Nestle worried about 'parallel' damage

Nestle New Zealand’s corporate services manager Maurice Gunnell told FoodNavigator-Asia that the misleading behaviour was damaging the brand reputation of Milo in the country.

“It is being sold without any reference to the fact that it is a parallel imported Milo product from the Philippines, therefore passing itself off as the local recipe for Milo when it is clearly very different in its taste and nutrition profile,” ​he said.

Gunnell conceded that the importer and retailers have made no effort to comply with local labelling laws and the “Philippine Milo has no local address of the importer, nor does it meet the local labelling regulations in several other aspects.”

On the question why Nestle could not block the product’s export into New Zealand at the source, Gunnell said that in this case the importer is buying it from traders in the Philippines and not directly from Nestle.

Katherine Rich, chief executive of the New Zealand Food and Grocery Council (NFGC), told FoodNavigator-Asia that Nestle exerting control in the country the Milo product is sourced from does sound like a simple solution.

“But it’s actually impossible. It only takes one legitimate customer to on-sell a cheap job lot to an opportunist New Zealand importer. Trying to control parallel imports at source would be like trying to catch water in a sieve,”​ she said.

Food industry body calls for level playing field

Rich said that when parallel imported goods are significantly different from what consumers expect, it becomes a losing situation for all stakeholders.

“The brand’s reputation is potentially damaged through the bad experience. Kiwi consumers can be particularly loyal to local products and they have high expectations about how things should look and taste,”​ said Rich.

Rich said that even though it is legal to import such products, the NFGC’s stand is that if retailers wish to bypass New Zealand companies, then the goods they bring in should comply 100% with New Zealand rules.

“New Zealand rules include requirements that labels are in English, contain contact details for an Australian or New Zealand importer and have appropriate warning statements for allergens etc. The reason for contact details is so that if shoppers have a question or concern that they know who to contact,”​ she said.

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