What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
Research by Lincoln University has highlighted that most of our agricultural products delivered fresh to market are transported on passenger planes, and tourists contribute to the cost.
It says the drop in tourism numbers could push up transport costs to the point where some businesses do not export at all and are put out of business.
Before Covid-19 hit, there were 550 international flights into and out of New Zealand each week, which carried 80% of New Zealand’s overall export airfreight in their belly-holds, and that it was worth $10.8 billion in December 2019. Only 20% of New Zealand’s airfreight was carried by dedicated air cargo-only freighters.
Before Covid-19, air freight was less than 1% of New Zealand’s total trade by volume, but about 16% in terms of dollar value.
The report says the decision may show a lack of understanding of the inter-relatedness of industries.
