Source: Radio New Zealand
The Wattie’s factory in Christchurch. Nathan McKinnon / RNZ
Big names like Heinz Wattie’s closing their doors are high-profile reminders of the pressure many businesses are under, one economist says.
Heinz Wattie’s announced this week it was planning to close some of its manufacturing operations.
The company said about 350 jobs were expected to be affected.
It outlined plans to axe the sale and production of a number of its products and brands, including frozen vegetables and Gregg’s coffee.
It would also no longer produce dips sold under the Mediterranean, Just Hummus and Good Taste Company brands.
Simplicity chief economist Shamubeel Eaqub said it seemed as though every recession or downturn took with it a big-name business.
In recent years, Cadbury has closed its Dunedin factory, several mills have closed, James Hardie shut its Penrose factory and Unilever closed in Petone.
“[Heinz Wattie’s] sounded like electricity prices and the cost of labour were the things they were really struggling with,” Eaqub said.
“Labour issues have always been a thing for New Zealand manufacturing. We can’t compete with Asian countries that have much lower wages,” Eaqub said.
“More recently, we’ve had the pressure of energy costs from various sources from electricity to gas that have made it harder for some processes. It’s partly because a lot of our manufacturing capacity is aged, so they’re not as efficient and effective as what’s available globally.”
He said big manufacturers and “old school” firms were under pressure, but there were also a lot of small manufacturers doing well.
“Sometimes that is a bit hard to see because they are quite small specialised businesses, not necessarily always visible to the rest of us.”
But he said traditional manufacturing was struggling.
“There’s no denial that the hollowing out is not new. It’s been happening for a number of years. Every time there’s a recession, it feels like we lose another bunch and then it’s smaller again. It happens in waves every time when all these pressures mount, these businesses that have been just managing to scrape by just don’t anymore.”
Business NZ chief executive Katherine Rich said the decisions being made were tough.
“From time to time, businesses do have to make changes and respond to markets and I think that’s what’s happened here. That many of the challenges that that company faced have been faced by a lot of food manufacturers, increased costs, increase in all costs, and of course, changing market conditions.”
Some of the Heinz Wattie’s brands, such as Greggs, had been picked-up by other producers and would continue.
“I think it was really a matter of time. You can’t continue to make really significant losses over many years and expect businesses to keep a footprint here, but it is a challenge. Now, over a period of years, we’ve lost a number of the major fast-moving consumer goods manufacturers,” Rich said.
“You think of the large-scale factories such as Unilever, Colgate, Arnott’s, Cadbury, when it was owned finally by Mondelez. Many of them have made similar decisions to reduce their footprint. I think it’s a factor of globalisation and the fact that this is a very high-cost market to try and manufacture in.”
But Rich said she was still confident about food manufacturing in New Zealand generally.
“If you’re looking at some of our manufacturers who export more in the commodity space, they continue to thrive serving markets in Australia, Asia, and across the globe.”
She said there were also entrepreneurs starting businesses with a good idea and pitching them to supermarkets.
“I’m really confident about the future of food manufacturing generally because we’re such a great place for high-quality ingredients. And we do have a growing market, we’ve got 5 million mouths to feed. But the main thing we have to do is not take our eye off the ball when it comes to trying to reduce the costs of doing business here,” Rich said.
“That’s why the work of the Ministry for Regulation and some of the government reforms to reduce business costs and make it easier to do business here are so important.”
Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
LiveNews: https://livenews.co.nz/2026/03/13/watties-a-big-name-reminder-of-pressure-on-nz-manufacturers/