While India’s economic gurus may be advising New Zealand to look beyond cricket and Commonwealth connections in any relationship between the two countries, these links have played well for exporting company QualityNZ.
Founded by ex-Black Cap Geoff Allott 12 years ago, QualityNZ has built on the strong cricketing links he and his colleagues have in India, making NZ the single largest exporter of sheepmeat to the sub-continent.
Allott’s role as managing director and 10-Test cap player is backed up with NZ cricketing royalty who are revered on the subcontinent as much as they are back in Aotearoa.
Daniel Vettori, Brendan McCullum and Stephen Fleming are shareholding brand ambassadors, and Sir Richard Hadlee is shareholder and patron to the company.
Despite the undeniable high profile of its ambassadors, QualityNZ has stayed below the radar of many back home as it steadily built its trade and reputation for selling high-quality lamb, sourced from Alliance, to five-star hotels throughout India.
Today the business has lamb in hundreds of hotels throughout India, with plans to expand after consolidating post-covid.
Allott returned back from a trade delegation visit over a decade ago convinced India was going to be the market of the future.
“We did eight months of due diligence on the market. There were issues there of corruption and issues of supply chain continuity and state specific regulations, and a lack of consistency in GST.
“But despite all that we came back with this idea it was the place to be.”
He was aware, though, that the only way to progress was to create their own subsidiary and supply chain from end to end.
“We needed a logistics system across 46 cities that included temperature control. We needed that ability to control product quality throughout.”
He acknowledges they had not picked an easy path, in a market where sheepmeat attracts 33% tariff rates, with other NZ products including wine attracting rates up to 150%, leaving little little margin even in the high end of the market.
The company is also importing and distributing some dairy products and seafood, and investing in education services.
India’s covid lockdown response, as in many other countries, saw the five-star tourist trade slam shut, and with it many of QualityNZ’s product outlets. This meant a fraught period for sales and the real risk of the business collapsing.
But Allott said the committed staff from NZ Trade and Enterprise (NZTE) played an invaluable role in keeping their business and the Indian market viable.
“They did much to ensure we could retain our staff, which meant we maintained contact with our customers, so when the doors re-opened we hit the ground running. It gave us massive respect and credibility here.”
Since lockdowns were lifted the company has gone on to enjoy 16 months of record-breaking sales.
Allott cautions that India takes time to develop, and relationships need to be established and trusted for trade to burgeon.
He said the challenge for the likes of NZTE is that there are so few businesses operating there that there are few working models for it to hang NZ’s hat on when highlighting the market to potential exporters.
“Part of the problem is that the 12-month KPIs used by most NZ businesses are simply not enough. A company needs a top-down strategy from board level to make India a separate project to work on.”
He agreed NZ companies have tended to fixate on the Chinese market under a free trade agreement, but with China softening and a desire to reduce reliance upon it, there is likely to be a lift in interest.
He is also hopeful more NZ companies appreciate that an FTA with India is not the pathway to engaging with the country, at least not in the near term.
“Indians cringe when they hear the term ‘comprehensive trade agreement’.”
He said Zespri’s moves to develop collaborative relationships with Indian kiwifruit growers is a smart one, helping to add some value locally.
“The way forward is a collaborative approach, and everyone should have that message by now. India is willing to do deals if the deal makers are willing to acknowledge India.
“The challenge for NZ is whether to hold off for the next five years trying for an FTA then, or do you work alongside India now to improve standards, procedures and products?”
• Richard Rennie travelled to Delhi with the India-NZ Business Council trade delegation, with funding from Asia New Zealand Foundation and Zespri.