3 Aug 2015

Talley warns business leaders to brace for change

12:41 pm on 3 August 2015

The head of one of New Zealand's largest food companies predicts more change for business over the next five years than it's seen in the past 25 years.

Sir Peter Talley

Sir Peter Talley Photo: SUPPLIED

Joint managing director of the Talley's group, Sir Peter Talley, told a conference last week a driver of the impending rapid change will be shrinkage of the jobs pool through changes in technology and global trade.

"If you're in business you've got to plan for it. The Australians are saying that 60 per cent of the jobs in Australia will disappear in the next five years."

The increased use of the internet and the rise of robotics was having a dramatic effect on job availability, Sir Peter told the Nelson Tasman Chamber of Commerce annual business leaders conference.

The Nelson-based Talley's group employs 6000 people across its New Zealand-wide businesses.

Sir Peter said a trend which should concern New Zealand food exporters was the move by others to "country of origin" labelling.

He said that as a result, New Zealand products would be squeezed from supermarket shelves overseas, particularly Australia.

"A recent decision by the Coles supermarket chain was that they made the declaration that all products in their house brand must be manufactured in Australia, using Australian labour. This "made in Australia" policy excludes New Zealand producers from 65 per cent of Australian shelf sales.

"To make matters worse, New Zealand is the only western country in the world that hasn't got country-of-origin labelling. Everyone agrees with me but why the Government won't act I don't know - maybe it's because we want to be seen as a free trading country, because our economy is so dependent on exports."

Sir Peter expressed his view on the need for New Zealand to liberalise policies around genetic modification. He said high value research was being driven offshore, and that science could help solve problems around burgeoning populations stretching natural resources further, particularly in a climate-change world in which water shortages will worsen.

"To maintain our place in agriculture it's imperative that we liberalise our policies towards genetic modification, but there's an anti-development, anti-business and anti-change attitude deep within our society."

Sir Peter said the use of GM could lead to reduced use of pesticides, help save farmers money and to help solve the puzzle of how to feed nine billion people predicted to occupy the planet by 2050.

He said ensuring workers had disposable income at the end of each pay week, and increased competition was necessary to the future success of the economy. He said disposable income was a key driver of the economy, and without it all businesses enterprises were affected.

Sir Peter said the public sector also needed to up its game in terms of competition.

"We need greater levels of competitiveness in all domestic markets and services, including health and education. We must change our educational aims and objectives, and teach our children the thrill of winning."

Sir Peter gave a dire warning on the flow-on effects if China was to devalue its currency as he predicted it would, and the impact that would have on the housing market, particularly in Auckland. He said it was wrong to assume the Government might step in to shore up the banking system if foreign owners pulled out en masse from the housing market and took their money back home.

Sir Peter's best advice to owners of businesses that were struggling was to make an exit earlier rather than later.

"If you do find your business model is not working and that you're riding a dead horse, the best strategy is to dismount."