Headlines from the New Zealand Business

Headlines from the New Zealand Business

FRIDAY October 5.

Sour Lion Nathan Fights on Page 1

Lion Nathan might have lost the battle for Montana but it is making sure that its vanquisher, British liquor giant Allied Domecq, does not forget it too easily. In a week which saw Lion take vital steps towards realising its wine strategy, announcing bids for Australian winemakers Banksia and Petaluma, the company also ground ahead with legal action to force Allied to relinquish a significant stake in its prized Montana. A representative of the stock exchange¹s standing committee ­ made up of Sir Duncan McMullin, Sir Ian Barker QC, and William Wilson QC ­ confirmed this week that even though the contest for Montana is over, Lion is still pursuing a complaint against Allied. The standing committee expects to hear the matter in Auckland on October 13 and 14.

Bolger says US knows New Zealand is behind it PAGE 1

New Zealand¹s US Ambassador Jim Bolger says there is absolutely no doubt in the United States that New Zealand is supporting its fight against terrorism, contradicting his former political colleague, Jenny Shipley. Mr Bolger also urged New Zealand business to continue to seek export opportunities in the US, saying that while there is a likelihood of an economic slowdown there are still enormous opportunities for Kiwi companies. As for whether New Zealand was viewed as being behind the United States, in the wake of President George W Bush¹s statement that countries are either for or against America, Mr Bolger said: "There couldn¹t be any question about it."

Summer Retreat at heart of Development Issue page 1

Pakiri, a summer retreat for thousands of Auckland day-trippers and sometime home to celebrities David Tua and Rachel Hunter, is at the centre of a development issue that could change coastal development in New Zealand. A Court of Appeal decision has opened the door for a disputed coastal subdivision to proceed at the popular Northland beach, and in doing so has potentially changed the way local authorities will assess developments under the Resource Management Act. After five years of delays and costly hearings, the decision allows Arrigato Investments and a related company to subdivide 148 hectares at the southern end of the beach into 14 lots. Development and marketing of the properties is expected to proceed before the end of the year.

Fears grow for Local Content at TVNZ page 3

Concern is growing that budgets for locally commissioned programming will be the next to come under the scalpel at Television New Zealand. The state broadcaster this week unveiled a major clear out of senior executives at TV One and TV2 and there are fears that there are more redundancies to come. Four senior executive positions have been axed, with the most significant change seeing both channels coming under the control of a new head of television. However, there is also concern in the independent production sector that local programming budgets will be the next to feel the knife. Jane Wrightson, chief executive of the producers¹ organisation the Screen Producers and Directors Association (SPADA), said there are already signs that local content will be squeezed and that will not be good news for the production sector.

CanWest Calls for Digital Spectrum page 3

CanWest has renewed calls for government to allocate spectrum so digital television can be accessed through terrestrial aerials. TV3 and TV4 managing director Rick Friesen, who this week marks his first year in charge of CanWest¹s New Zealand television operations, told NZBT that one of the key challenges facing the industry is the arrival of digital services. Although the network is committed to the idea of a free-to-air digital service, it disagrees with Television New Zealand over the delivery mechanism. The state broadcaster favours the satellite route. However, Mr Friesen said the company will continue to lobby government to support a terrestrial option similar to the ITV Digital service in the UK in which viewers receive digital signals through a standard aerial

Chrisco Hampers in dispute with GM Page 4

Chrisco Hampers Ltd ­ a trans-Tasman gift hamper operation ­ has staved off a High Court summary judgment application brought by former general manager Paul Perniski. But the company is unlikely to have heard the end of the matter, with papers due to be lodged in the Employment Court. Mr Perniski, a former senior manager with Bluestar Group, brought the action against Chrisco and a related company, Hamper Sales 2000 Ltd, to enforce a settlement agreement worth $222,000. The Auckland based hamper company is one of the largest in the Australasian market and is understood to have a multi-million dollar turnover. Court documents show the agreement relates to the company¹s abrupt termination of Mr Perniski¹s position earlier this year, only five months after he took up the position. It appears that the termination was not due to Mr Perniski¹s performance, but due to the owner, Richard Bradley, changing his mind about stepping back from the business.

Fletcher Building Resolving South American Investments page 4

Fletcher Building is close to resolving its problematic South American concrete business, according to chief executive Ralph Waters. One month after visiting the sites and talking with investment bankers in South America, Mr Waters said the company is moving towards finding a solution to the investments in Peru and Bolivia, which lost Fletcher $15 million last year. "Without disclosing what¹s happening we are progressing some of our thoughts and actions in that regard," Mr Waters said. He declined to give further details but said the offshore business is "probably cash neutral" at the moment and "we don¹t have to send any money there to keep it going every month". Fletcher Building has been wanting to exit some of its local businesses, including steel and Aluminium, but has been unable to attract a suitable price.

Mangatu Boss Point to Farming Systems Rethink Page 6

Good times continue to roll across the export sector but according to one of New Zealand¹s largest farm corporations a fundamental change is required in farming systems to ensure long-term profitability Gary Alexander, chief executive of Gisborne-based Mangatu Incorporation, believes fundamental changes need to be made in pastoral production systems and in marketing strategy if New Zealand is to maintain its export-led growth pattern. Mr Alexander, who heads Mangatu Incorporation¹s 25,000 hectare farm block, said New Zealand farmers should be repositioning their businesses now, while times are good, so that when the downturn eventually hits they are better placed to succeed.

TelstraSaturn Still Committed to page 8

TelstraSaturn¹s Australian parents remain committed to their New Zealand operation, even though the entire funding burden will now fall on Telstra. Austar United Communications ­ a 50 percent partner with the Australian telco giant in TelstraSaturn ­ this week announced a restructuring of its shareholder agreement which will see Telstra providing any further funding through subordinated debt. Under the agreement, Telstra will also have the right to buy Austar¹s share in the New Zealand telco in 2004 However TelstraSaturn chairman John Porter ­ who is also chief executive of the Austar ­ stressed this week that the Australian companies are still fully committed to the joint venture and there is no danger of funding shortfalls. He describes the new shareholder arrangements as a "clear endorsement by Telstra of the New Zealand strategy" and added that Austar still wished to retain a stake in the company.

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