Major NZ seafood exporters hit by Chinese trade suspension

China is New Zealand's biggest seafood export market, closely followed by the US and Australia. Photo / Michael Craig

Seafood export leaders and Government officials are urgently seeking clarification from Chinese authorities after learning China has suspended exports from two major New Zealand seafood company processing sites.

The Ministry for Primary Industries said China had suspended exports from a Sanford site in Havelock that processes mussels and a Sealord facility in Nelson that processes fin fish and fishmeal for animal feeds.

The suspensions were due to issues around the interpretation of the World Health Organisation's Covid guidance and food safety management, said MPI deputy director-general policy and trade Julie Collins, in response to Herald inquiries.

Both sites had been recently subject to live video audits by Chinese Customs, she said.

Both had been complying under New Zealand's alert level 1 protocols.

China is New Zealand's biggest seafood export market, closely followed by the US and Australia.

Sanford acting chief executive Andre Gargiulo told the Herald NZX-listed Sanford operated all its facilities to the highest standards of food safety.

"We have been adhering to New Zealand's Level 1 protocols for processing and had put in place further requirements for the Chinese market. We are working closely with MPI to find a way forward."

In a statement to the NZX today, Sanford said its Havelock mussel processing facility is one of two New Zealand food processing plants which were video audited recently by GACC, the Chinese authority responsible for Chinese customs.

"China has a concern about ensuring that no risks are posed by any goods from any country being imported into China. The authority raised a number of queries with Sanford following the audit and has placed a suspension on imports from that plant while these are resolved," the statement said.

"Sanford operates all our facilities to the highest standards of food safety. We have been adhering to New Zealand's Level 1 protocols for processing and had put in place further requirements for the Chinese market.

"Sanford does not anticipate a material impact on our operations or sales, from the current suspension of exports from our Havelock plant to China and we will continue to keep the market informed on any significant developments in this situation."

Sealord chief executive Doug Paulin said the company got the suspension news yesterday.

"We are working closely with Ministry for Primary Industries and other Government officials to resolve the situation, which is around the interpretation of the World Health Organisation's Covid-19 guidance, and food safety management.

"Sealord operates all our facilities at the highest standards of food safety, passing all previous audits. We have in place additional protocols for China. Sealord won an industry Seafood Star Award for its Covid-19 response including implementation of strict hygiene and safety measures.

"At this point in time, there is little material impact for Sealord, however it is important for this to be resolved for the future. We await the outcome of discussions between Government officials and their counterparts in Beijing," Paulin said.

Industry organisation Seafood NZ said exports to China in 2019 returned $713 million, up from $597m in 2018. However more recent Government figures put the value at $400m in the year to October 2020 after the impact of Covid on China's hospitality and retail sector.

Greenshell mussels were the top-earning export to China in 2019, earning $337m.

MPI's Collins said New Zealand had taken strong measures to prevent the spread of Covid-19 and did not have community transmission.

"This includes our strong hygiene measures put in place by food manufacturers and exporters, which adapt to each level of risk according to our Covid-19 alert level.

"It's important to note that the WHO's guidance says it's highly unlikely that Covid-19 can spread by food or packaging."

MPI had spoken with the two companies and sector groups.

It would continue to work closely with them.

Sector observers were last night mystified by the suspension development.

Sanford fishing trawler. Photo / Supplied

The Ministry for Foreign Affairs and Trade in October said the value of New Zealand seafood exports to China was so far down almost 21 per cent compared with 2019, and down 5 per cent on 2018 figures.

It forecast sales of premium fresh seafood were likely to continue to be sluggish due to the slower recovery in the restaurant and hospitality (hotels) sectors as well the banquet sector, which heavily impacted lobster sales in particular.

However there were signs for optimism with spending in these sectors starting to trend upwards, the ministry said. Consumer perceptions of the risks around imported frozen products could have had an impact on demand, it said.