Tax regime favours small and high-tech over global brand creation

Andy West, CEO of AgResearch and Innovation Waikato, is a fan of creating small, innovative food companies with new technologies.

New Zealand investment in land rather than brands underlines the need for a new livestock-derived food and ingredients centre in Hamilton, says the chief executive of Innovation Waikato, Andy West.

Dr West - who is also chief executive of AgResearch - said the idea New Zealand could create another Nestle-sized global food company was "entirely fanciful".

Lack of a capital gains tax promoted investment in land instead of development of opportunities such as bigger food brands companies.

So a different model was needed to exploit sector developments unless the Government was prepared to change incentives to invest capital.

"If we're not prepared to address a capital gains tax the natural consequence is we have to sell our IP overseas," said West.

"We have to create small, innovative food companies with new technologies and we have to sell them to whoever wants to buy them."

Although Fonterra might pick up some ideas, those who could afford to pay were mostly offshore.

"We've got to get big money out of them and we've got to re-invest it in the next set of companies."