Fresh food exporter Peloris sees NZ-China opportunities as US trade tension mounts

Peloris co-founder Peter Verry sees opportunities to get more New Zealand products into China. Photo / Supplied

Peloris Group, which specialises in exporting fresh food to China, says opportunities are opening up for New Zealand and Australian producers while Sino-US trade relations remain strained.

Co-founder Peter Verry says if Australia and New Zealand producers can meet China’s quality and supply standards, then they could benefit from the trade rift between the world’s two biggest economies.

The small Australian company has carved out a niche for itself in the export of produce - notably fresh milk from the a2 Milk Company - to China.

Verry says Peloris pioneered fresh exports of Australian and New Zealand food to China in 2014.

Back then, export clearance was three weeks and product shelf life was about 20 days “so it didn’t work”.

He says Peloris pioneered fresh milk exports to China a decade ago.

“We’ve worked with China customs officials and departments for the last 10 years off and on, and we’ve now got an officially credited 12-hour clearance lane in China,” Verry said.

Finely honed logistics means milk produced in Sydney on a Thursday can reach China by Sunday.

Peloris now exports yoghurt, cheeses and seafood to China.

The company has gone from being mostly retail to supplying food manufacturers in China - one of them being a frozen cake manufacturer.

“Over the years there’s been a consistent demand for Australian and New Zealand product, but obviously there are a number of European dairy products going into China, and from the US.

“We have inquiries now from customers in China who are basically pulling all the US products off the shelf.

“We had an inquiry from a major food manufacturer who is doing a product launch in August - so everything is last-minute - and we have to get everything done because they have ditched their American ingredients.”

As it stands, average US tariffs on Chinese goods are still above 50%.

“There’s a big opportunity for Australian and New Zealand products whilst there’s this disruption to the US-China trade with the US tariffs,” Verry said.

“I think the opportunity is for Australia and New Zealand producers to actually get a foot in the door and build relationships with the Chinese buyers in retail and in wholesale food manufacturing,” he told the Herald.

“What’s bad for the US at the moment is good for us,” Verry said.

“It might not last more than six months. It might last the next three years, but there is a window of opportunity and we see it as a really big opportunity.”

China still gets products from Europe, but Australia and New Zealand have inherent advantages in terms of the supply chain lead times.

Peloris is talking to one New Zealand butter manufacturer (not Fonterra) and a cheese manufacturer about getting product into China by the end of the year.

Verry said China was still a tough market regardless of the leg-up that local exporters might be getting from China’s issues with America.

“There’s still significant regulatory barriers that need to be met and overcome,” he said. “But that aside, it’s a good opportunity.”

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.