Fiji coup costs: $50m and rising

By LIBBY MIDDLEBROOK

Trade between New Zealand and Fiji is declining rapidly because of the coup and is tipped to cost the business community here about $50 million.

Export-order delays and cancellations have poured into New Zealand firms this week. Many companies reported substantial drops in profit forecasts for the Fijian market.

Trade New Zealand's Fiji commissioner, Jo McEvoy, said while it was too soon to estimate the long-term effects of the crisis, it was likely to cost local companies up to $50 million.

"If you look at what happened in 1987, you could say it's going to cost anything up to $50 million. In another week or so we'll know a lot more, but it's definitely going to have an impact," said Ms McEvoy.

She is hoping to set up meetings around New Zealand for exporters to work on contingency plans.

The last Fijian coup is understood to have cost New Zealand companies at least $40 million, with total exports dropping to $89 million in 1987 from $125 million a year earlier.

Last year New Zealand exported about $200 million worth of goods to Fiji, mostly construction, food and beverage products.

Tropex Exports, which has been sending steel and building products to Fiji for three decades, is one of the trading house affected by the coup.

Its marketing director, Rob Stanfield, said substantial orders had been delayed and the company's $15 million business with Fiji would suffer from the chaotic political situation.

But the company had experienced worse in other places. "Business has come to a standstill. We haven't had any orders cancelled but they're definitely being held back because people are so uncertain about what's happening," Mr Stanfield said.

"But this stuff in Fiji is nothing compared to what's happened in other parts of the Pacific. We've had more trouble in Papua New Guinea than we're ever likely to have in Fiji."

Auckland-based food and beverage trading house Tara Exports has had orders delayed and cancelled. Some large retail customers had their buildings burned to the ground last week.

"The situation's got past just being a glitch in terms of business. You've got some supermarket owners over there who probably won't rebuild," said Tara's manager, Nigel Hendy. He reckoned it took the company six years to recover from the 1987 coups.

"But Fiji's probably our second- largest market and it's of such value that we can't turn our backs on it. We'll keep on exporting there as long as we keep on getting paid."

The travel market has also taken a hit, with Air New Zealand reducing flights to Fiji because of a big fall in demand.

Spokesman Alastair Carthew said the number of Japan-based travellers booking trips to Fiji had dropped significantly.

Pacific-based Reef Shipping's commercial manager, Brian Batchelor, said incoming orders had slowed.

A timeshare apartment project for Auckland company Hartner Construction is also on hold.

George Speight talks to IRN's Barry Soper

(10 min).