7 Feb 2014

PM seeking resolution on goods ban

5:20 am on 7 February 2014

The Prime Minister is in Australia on Thursday where he will raise the problem of supermarkets effectively banning New Zealand goods from their shelves.

John Key says it is not clear whether the approach is legal under the Closer Economics Relations agreement with Australia, but it clearly breaches the spirit of the deal. He will meet with Prime Minister Tony Abbott in Sydney on Friday.

John Key and the delegation arrive in Sydney.

John Key and the delegation arrive in Sydney. Photo: AAP

"The fundamental message will be it's an Australasian market. We think Australian supermarkets who have complete and utter dominance when it comes to selling to consumers in this space really should play ball with both New Zealand and Australia," Mr Key said.

The Labour Party said Mr Key needs to assert the rights of exporters during his talks with Mr Abbott.

The Food and Grocery Council says Australian supermarkets Coles and Woolworths are refusing to renew contracts with New Zealand suppliers for the sole reason that they are not Australian.

Labour says the decision by the grocery giants is a fundamental threat to exporters, affecting exports worth more than $400 million a year.

Trade spokesperson Phil Goff says a soft approach by Mr Key during the talks isn't good enough and he needs to tell Mr Abbott to end these actions.

"The Australians wouldn't tolerate that if New Zealand supermarkets were doing that to their goods, nor should we tolerate that action on the part of the two big supermarkets in Australia. And John Key has to simply lay it on the line."

Another sensitive issue the Prime Minister will raise with Tony Abbott is the treatment of New Zealanders living in Australia who are unable to access all benefits in that country.

However, Mr Key says that is a matter for Australia and he has no leverage to force its government to change its stance.

He has raised the point with Mr Abbott and former Labor Prime Minister Julia Gillard in the past, but has failed to win any concessions.

Nor is Mr Key likely to force Australian supermarkets to change their approach, given that CER is an agreement between governments.

Travelling with John Key are six Cabinet ministers and a delegation of 47 business leaders.