High cost of power, consumer preference for cheap exports blamed for ‘devastating’ Wattie’s news

Wednesday, 11 March 2026

Business, food industry participants and workers say they are devastated by the loss of 350 jobs and entire food lines from Heinz Wattie’s New Zealand operations announced Wednesday - but they are not entirely surprised.

The company, the parent of which is owned by US and Brazilian private equity and listed on the Nasdaq, is preparing to shut its Christchurch frozen vegetable plant and a Dunedin coffee factory, with a loss of 350 jobs. The move also puts contracts with 220 mainly Canterbury growers at risk.

Heinz Wattie’s Limited will consult on proposals to close three manufacturing sites – in Auckland, Christchurch and Dunedin – and to stop selling Wattie’s frozen vegetables, Gregg’s coffee and dips sold under the Mediterranean, Just Hummus and Good Taste Company brands.

The company blames “globally high inflation”, high input and logistics costs and the cost-of-living crisis for ongoing pressure on the commercial performance of the affected sites.

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E tū delegate Kathy Perrin, who has worked at Heinz Wattie's for 46 years in different roles, says the impact on workers will be devastating.

'I am gutted for our workmates. Some are retirement age, paying high rents, living pay cheque to pay cheque,' she said.

'The devastating financial and emotional impact on my colleagues cannot be overstated. The average length of service is around 30 years. There is nowhere else to go.“

The company said under-pressure shoppers moving away from its premium brands to cheaper rivals was behind a run of poor financial returns in the last few years.

It said the same thing in late 2024 when it said it would significantly reduce its intake of New Zealand-grown peaches from Hawke's Bay. Cyclone Gabrielle was one reason, but another the company cited was the consumer preference for cheap imported peaches in the time of a cost of living crisis.

Alan McDonald, from the Employers and Manufacturers Association, agreed that extremely high input costs - particularly electricity - were straining manufacturing, and it would not be the last operation that would have to close its doors.

He said it was “bloody awful for those 350-odd people - and it’s part of an ongoing trend… we saw some pretty significant closures around the country last year, and it looks like we’re starting 2026 with a few more.”

McDonald said manufacturing had been tough for a while, evidenced in the manufacturing index which had been trending down for two years and had only just started picking up in the last five months.

The three typical input costs for manufacturers were people (labour), electricity and plant and equipment. Wage increases had only gained 2.1% in the last year on average, so McDonald did not think that was responsible, but electricity continued to rise, and plant and equipment needed a solid business case to justify investing enough to keep it up to scratch.

“Electricity is a big input issue for manufacturers, and frozen vegetables take a lot of power so costs for that will be very high. I don’t know what combination of factors led to this devision, but I know it would have been a difficult decision - no one takes these things lightly.”

Poor returns

Financials belonging to the HJ Heinz Company (New Zealand), which owns Heinz Wattie’s, suggest the operation has needed to right-size itself for years.

It is obligated to file financial statements with the Companies Office because of its size, and overseas ownership.

In the last report filed covering the 12 months to the end of December 2024, it reported revenue of $745 million.

But a massive impairment of $210.5m wiped out its profitability entirely.

As a result, the company posted an after-tax loss of $189.5m.

That compared with a loss the previous year of $50.4m.

The impairment, or write down of value, was both for the company’s “intangible” assets, and its property, plant and equipment.

$117,607,000 of the impairment was recognised against intangibles, including its trademarks, brands, recipes, and goodwill. Goodwill is a value put on a company’s standing in the market, including things like customer loyalty, and the backing of merchants.

A further $83.5m was the impairment of physical assets like property and equipment.

The valuation of these assets was determined by management, and involved a “high degree of judgement” in estimating them, the financial statements read.

However, it said: “The H.J. Heinz Company (New Zealand) CGU [cash-generating unit] experienced a significant decline in sales volume and budgeted gross margins resulting from shift in consumer sentiments from premium brands to other brands.”

It continued: “These are mainly driven from the increasing costs of living pressures and challenging operational conditions.”

Different view

The union that covers workers at affected plants is E tū, which says the closure of the plants and loss of jobs is part of a pattern.

“We've seen it with Carter Holt Harvey at Eves Valley, Sealord in Nelson, Kinleith Pulp and Paper, and now Heinz Wattie's. It's a trend that is deeply damaging to workers, to communities, and to the country,' said the union’s Finn O'Dwyer-Cunliffe.

He says Aotearoa should be producing more food locally, not less.

'We should be investing in local manufacturing, keeping people employed, and strengthening our food security. Instead, we're watching iconic New Zealand brands disappear from our production lines. That's not good for workers, it's not good for regional economies, and it's not good for the country.“

'The Government has been asleep at the wheel while local manufacturing collapses around the country. These are market failures that demand a response, and working people deserve better than a Government that shrugs its shoulders while good jobs disappear.'

Perrin says the company has also let down its long-serving seasonal workers.

'Seasonal workers who have worked here for over 20 years are being made redundant without financial compensation.

“The company should be making sure they receive compensation, and that a fair process is followed supporting those who will be impacted by this change.'

Consultation will run from March 11 to 25, with the final number of job losses confirmed after redeployment options are considered.

Good NZ veg

Process Vegetables NZ chair David Hadfield said the organisation was surprised by the extent of the changes Heinz proposed.

It was likely the crops grown for Heinz would now be lost to the regenerative farming equation in Canterbury, he said.

There were also issues around food security as growing vegetables domestically was valuable.

'We are already importing a lot of frozen vegetables, and some fruit from overseas, and it's probably not as good as what we grow here,“ he said.

Even with very high yields for processed peas, the company could not make the sums stack up, and he believed one reason was the 'over the top' amount of rules and regulations that had been bought in over recent years, he said.

'Growers have to spend too much time doing paperwork rather than in the paddock, and there is a time cost that comes with it.'

Hadfield said there was nothing they could do about the announcement today, but the processers that were left needed to buy NZ-grown vegetables.

'And that message needs to get to the supermarket: buyers need to look at where a product is grown, and buy NZ grown vegetables. Otherwise, we will see more of this happening.'