It's also important to remember that deregulation does not necessarily equate to competitiveness.
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Ignoring the fact you’re damaging your consumer market for the moment, and let’s talk about being successful exporting internationally.
If you’re going to go on your own, then you need to worry about your international brand, and that means ensuring that your countries standards are sufficiently high to be seen as delivering quality.
New Zealand provides a very simple example of this. Dairy is one of their major exports.
They have been very successful in China selling milk products, especially after the 2008 Chinese milk scandal where infant formula contaminated with Melamine resulted in the death of 6 babies, and the hospitalisation of another 54,000.
It’s a deeply sensitive issue in China, and New Zealand’s brand is incredibly respected. New Zealand accounts for about 70% of China’s dairy imports.
With China’s growth leading it to be New Zealand’s best prospect for the future, disaster struck in 2013 when a New Zealand multinational dairy co-operative called Fonterra had to issue a recall for Whey products used to make baby formula.
Tests had shown contamination of Clostridium botulinum, which can cause botulism. China, who is understandably sensitive in this area, issued a temporary ban on the applicable ingredients from New Zealand.
It was eventually discovered that the product did not have a botulism-causing strain, but if it had been, then it would have been a disaster for New Zealand’s brand, and their dairy exports to China.
Country brands are incredibly important, and one of the only ways a government can ensure some companies doesn’t ruin it for all other companies is through making and enforcing effective regulation.
A comment like “We can deregulate n to compete on the world stage” is just too simple. A Brexit UK has to ensure we have a competitive brand, therefore advocates of deregulation should have to state exactly where and what they want to deregulate.
The work doesn't end there. New Zealand also has a problem in China in terms of counterfeiters. Companies in China try to benefit from New Zealand’s brand by writing things like “Made in New Zealand” on their products.
Chinese companies also use New Zealand's Trade and Enterprise Fern logo, pictures of the New Zealand Prime Minister, and one Chinese company even used Photoshop to depict their factory in New Zealand.
Supply chains can also prove to be a problem, in 2016 the Jiang Di International Trade Company was caught repackaging out of date Fonterra milk powder that it had obtained despite Fonterra’s onselling rules.
This again could have damaged the company’s reputation, or even New Zealand’s generally, and this is why countries have to work with other countries to ensure they adequately respond to things like trade mark violations.
Being successful internationally just not happen without work. A country has to find ways both to promote its brand and defend its brand.
So, while it is true that consumer’s respond to lower prices and deregulation may achieve that, narrowing consumer behaviour to one variable shows a very poor understanding of what it takes to be successful in a market.
Quality counts.
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Quality counts.
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