Food Alternatives

Case 2: New Zealand Butter Battles European Bureaucracy

Introduction

Fonterra is the world's leading exporter of dairy products and responsible for more than a third of international dairy trade. A recent case study (Starch & Everett, 2010) published in Czinkota, M, Ronkainen, C. and Beal, T (2011), “International Marketing”, 2nd Asia-Pacific Edition, illustrates to us how much of a market share a company can have before governments step in too input quotas and regulations.

The case study essentially is about how Fonterra’s European market of New Zealand products was limited suddenly by European forces. Its market was shrunk by almost half in order to stop Fonterra’s control over dairy products and give chance to other European companies. This brought problems to Fonterra and to New Zealand as well, because before actually settling the market distribution products from New Zealand were not allow to go in Europe for a while, hurting the farmers and companies in New Zealand, but at the end it all was solved with some time giving all the players an opportunity in the market.

Agreements Creating Business Opportunities & Fonterra’s Preferential Access

Agreements between governments are the focal point to business opportunities in all countries around the globe, some examples of these agreements include North American Free Trade Agreement (NAFTA), Australia-New Zealand Free Trade Agreement (AANZFTA), Association of South East Asian Nations (ASEAN) and The European Free Trade Agreements (EFTA) are some of the many agreements governments put in place to benefit there countries economies. The agreements are put in place to illustrate restrictions and regulations to be followed but also in turn to enhance the trade between countries and also to not damage local businesses in the countries involved. A clear example of this is the (AANZFTA) which according to recent research extracted from the (Australian Government – Department of Foreign Affairs website)...