MONEY TALKS: Still time to tap into Australia's vibe?

By Paul McBeth

Nov. 16 (BusinessDesk) - About 1,000 kiwis are jumping across the Ditch every week for sunnier skies and the chance of a better life. On the face of it, they're probably doing a rational thing.

New Zealand unemployment is at a 13-year high and companies don't look like they're going to start hiring again, while Australia has continued to beat deteriorating expectations for its labour market, despite its resources sector slowing down as China comes off the boil.

And that's before you take into account the fatter paycheck most folk can get if they switch loyalties for the green and gold.

The reality is, the place is still humming. Its economy produced another 10,000 jobs in the September quarter, while ours contracted, and today's announcements about sales growth at Kathmandu, driven out of Australia, made compelling reading for investors, who pushed its share price up nearly 7 percent on the news.

I travelled to Melbourne courtesy of the Food & Grocery Council to cover their annual conference, and the city's got the electricity of a place with the vibe of success.

People are spending money in bars and restaurants in the middle of the week, the CBD has scaffolding all around the place as new construction gets under way, the retail district isn't lined with 'for lease' signs. There aren't the obvious signs that tend to creep in when times get tough.

That's not to say things aren't getting a little bit tarnished - Aussie companies are definitely tightening their belts as the global recession catches up with them, and I heard murmurings that some of their property developers might have overextended themselves.

Still, it looks like kiwis' love affair with the West Island isn't going to fall apart any time soon. After all, everything's relative.

And it's not just people looking across the Tasman - local businesses looking to take the dive internationally generally make Australia their first port of call.

The FGC, which represents the New Zealand supermarkets and their various suppliers, has embarked on a plan to lift its members' exports.

While that may seem somewhat counter-intuitive given that the two biggest players in the sector - Foodstuffs Co-operative and Progrssive Enterprises - are domestically focused, and many of their suppliers are part of much bigger global corporates, there are a whole wadge of niche players in Kiwiland stocking Countdowns, New Worlds and Pak'N Saves, but have yet to take that next step overseas.

If they can ride the Aussie wave, then that should lead to a pick-up in the New Zealand economy if some of New Zealand's smaller food manufacturers can convince banks to fund a little expansion in the country's lower tier of businesses.

However, it isn't simply a matter of turning up in Australia - you've really got to work at it.

One of the things at the FGC conference that knocked the socks off those attending was a presentation from Australian supermarket giant, Coles.

Their representative, Allister Watson, gave the rundown of how the supermarket is tracking, and was pretty blunt in setting out what kiwi suppliers need to do to get a taste of his business.

Without a point of difference, Coles won't stock kiwi products that simply match Australian goods. The Aussie consumer is a parochial beast and wants to back locally made products, he said.

Given the presentation was titled 'Growing your business with Coles', the kiwis in the audience weren't overly impressed.

But it does underline the point that Australia isn't the land of milk and honey.

Sure, the country avoided recession but areas on the eastern seaboard don’t see the future as brightly as Western Australia, and nothing comes for free.

On the other hand, Watson pointed out New Zealand still has some competitive advantages over its bigger brother with cheaper manufacturing costs stemming from lower wages and the weaker kiwi dollar.

While Australia may still seem like the place for your great escape, as with every investment decision you make, there are risks that go with the potential reward.

As always, however, only time will tell as the facts slowly emerge.

(BusinessDesk)

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