Fridge and dishwasher maker Haier says it will make Fisher & Paykel’s exclusive dealer arrangement a key issue in New Zealand’s upcoming free-trade talks with China.
Haier China bought distribution company Black Diamond Holdings’ 46 per cent stake in joint venture company Haier Appliances New Zealand on Wednesday.
Haier NZ managing director Ken Lilley said the deal would make Haier New Zealand a direct Chinese subsidiary and put more “political weight” behind efforts to end Fisher & Paykel’s exclusive dealer arrangement (eda).
Mr Lilley said the new structure would also allow Haier to come in with “sharper pricing” to combat its reduced market share since F&P announced the Noel Leeming deal.
Fisher & Paykel whiteware prices rose 5 per cent to 7 per cent this month. The company has exclusive dealer arrangements with Farmers, Smiths City, Powerstore, Appliance Connexion, LV Martin and Newbolds.
Last month F&P signed a similar deal with the 45-strong Noel Leeming chain, which had previously stocked Haier products.
Based in China, Haier is the fourth biggest whiteware manufacturer in the world, supplying 165 countries.
Mr Lilley said New Zealand was the only country that limited distribution with such an arrangement. “There’s no way they (Haier) are going to let this eda lie. This is going to be right at the forefront of the free-trade talks.”
New Zealand started talks with China last year. The third round is scheduled for Wellington next month.
“The issue is that there’s a free-trade agreement on the table which gives New Zealand access to 1.3 billion Chinese and here we are with some archaic eda agreement which says to Haier, China’s biggest appliance company, sorry, you can’t trade in our entire market,” Mr Lilley said.
Fisher & Paykel chief executive John Bongard dismissed the claims, saying there were many other outlets through which Haier could sell its products.
“I don’t think it’s us they should be looking at but themselves and their own products as to why they can’t get distribution elsewhere…If they can’t get people to stock their brands it’s hardly our problem.”
He did not want to comment on the China free-trade issue, but said he doubted that was the main reason for the restructure.
Noel Leeming’s owners, Gresham Private Equity’s 34-strong Bond & Bond chain, continues to sell imported Haier, Samsung and Mitsubishi.
Mr Lilley said the F&P deal with Noel Leeming took out 35 per cent of Haier’s market share and gave F&P more power in the market and more opportunity to raise prices.
“Maybe (they think) we’ll all give up and it’ll all get too hard and we’ll go to Mitre 10 and The Warehouse.”
From stuff.co.nz