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Speaker 1: So Nicola Willis speaking, I've got the two names. You're

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Speaker 1: only two names you need to mention in politics today

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Speaker 1: out there, Nichola Willis and Winston Peters. And they're both

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Speaker 1: on the program anyway. Nicola Willis, she's there after six.

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Speaker 1: At the weekend, had her big supermarket announcement and suggested

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Speaker 1: that food Stuffs and Woolwurst could sell parts of their

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Speaker 1: business to a new entrant or and this was the

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Speaker 1: big stick that she's waving around risk the government breaking

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Speaker 1: the duopoly up. Patrick Noon is a former managing director

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Speaker 1: of Costco and he's with me this afternoon to talk

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Speaker 1: about this. Good afternoon.

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Speaker 2: Hello Ryan, how are you really good?

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Speaker 1: Thanks? You were quite heavily involved in setting up shop

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Speaker 1: here in New Zealand for Costco. How hard is it

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Speaker 1: to do?

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Speaker 2: Coming into a new country is always more difficult and

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Speaker 2: there's a lot of you know, you have to work

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Speaker 2: with a lot of the government regulations, et cetera. But

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Speaker 2: New Zealand was a pretty much a monopoly market, so

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Speaker 2: there was a lot of opportunity for price and bring

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Speaker 2: goods to the country at a better price than what

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Speaker 2: was being sold there. And also we can bring goods

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Speaker 2: from overseas that New Zealanders couldn't get so that we

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Speaker 2: had a we didn't have a lot of help, but

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Speaker 2: we saw a lot of opportunity in New Zealand. For sure.

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Speaker 1: Is breaking up the supermarkets the way to go about this.

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Speaker 1: I mean, what for you were the biggest barriers?

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Speaker 2: The government regulation? I suppose real estate prices was a

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Speaker 2: massive barrier and is a massive barrier. Just not a

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Speaker 2: lot of retail space available to be purchased or a rent,

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Speaker 2: so I think that's a huge barrier. And then logistics

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Speaker 2: as well, getting stuff into the country at a nice

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Speaker 2: timely manner was also of an issue, but we got

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Speaker 2: past that in the end. But for a new entrant

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Speaker 2: going to the market, it's simply the cost of getting

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Speaker 2: into the market, which was a big barrier.

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Speaker 1: And that was less to do with what the competitors

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Speaker 1: were doing, but more to do with regulation. Do you

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Speaker 1: mean like zoning of land and stuff?

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Speaker 2: Yeah? Absolutely. I mean when we built a building in

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Speaker 2: auct and we have to build a a three story

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Speaker 2: building or a four story building, because typically a costco

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Speaker 2: around the world is you know, fourteen hectares of land

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Speaker 2: or fourteen as the land I should say, with you know,

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Speaker 2: seven hundred car parking spaces on one level in New

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Speaker 2: Zealand that simply wasn't the bible to purchase at all.

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Speaker 2: And so part of the cost of getting into the

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Speaker 2: country is you have to buy a limited amount of

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Speaker 2: retail land, which costs a lot more money to buy.

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Speaker 2: And then because you're building a structure that's multy story,

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Speaker 2: it costs two or three times more than what a

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Speaker 2: typical structure would cost anywhere else in the world.

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Speaker 1: With logistics, is that you've clearly something that COSTCO was

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Speaker 1: able to overcome. But is that something that we just

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Speaker 1: have to accept. I mean, we are so far away

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Speaker 1: from the rest of the world.

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Speaker 2: No, you don't have to accept it. All you have

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Speaker 2: to there has to be more more ships, more often

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Speaker 2: going into the country, which you can give the which

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Speaker 2: gives you a better certainty of supply, and that works

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Speaker 2: both ways. It works with we will buying New Zealand

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Speaker 2: merchandise to sold Australia. Getting that certainty of sailings and

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Speaker 2: getting to arrive on time was also pretty important. So

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Speaker 2: I think that's a country problem and it's the same

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Speaker 2: in Australia as well, just a different scale.

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Speaker 1: Are you surprised that the government hasn't just picked up

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Speaker 1: the phone and rung Elder yet, you know, to try

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Speaker 1: and find out what their views are. Why the hell

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Speaker 1: they aren't coming here.

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Speaker 2: Well, it's a good it's a really good question. I

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Speaker 2: know that coming to New Zealand from North America, or

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Speaker 2: coming to New Zealand from Asia, or coming to New

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Speaker 2: Zealand from Europe, it's a long way down there, and

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Speaker 2: to start an operation down there without any infrastructure is

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Speaker 2: a pretty complicated business and whiskey. But most of the country,

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Speaker 2: most of the companies are investing in New Zealand. Who

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Speaker 2: can invest in New Zealand at first start of their

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Speaker 2: operations in Australia. So they've got an infrastructure in place

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Speaker 2: like Costco did and they're able to leverage that and

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Speaker 2: bring those goods, the same goods to market into the

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Speaker 2: New Zealand market. So yeah, I think Oldie would a

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Speaker 2: great fit for the New Zealand market.

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Speaker 1: To be honest, why do you think they're not here?

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Speaker 2: They're a pretty conservative light. I don't have much to

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Speaker 2: do with them, but you know they like to build

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Speaker 2: their infrastructure and expand from there. So I would be

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Speaker 2: surprised if they haven't looked at the New Zealand market

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Speaker 2: in more than a few times. But I don't have

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Speaker 2: any inside tack on why they're not there already.

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Speaker 1: And yeah, we've definitely tried to get them on a

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Speaker 1: lot of a number of times. It's not for lack

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Speaker 1: of trying. Hey, what's with Costco having one store? Do

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Speaker 1: you think are their plans for more? Do you know

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Speaker 1: like what it is that edit?

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Speaker 2: Yeah, no, there was when I I've been retired now

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Speaker 2: for a year or a year and a bit now,

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Speaker 2: so when I left it, it definitely was. We're looking

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Speaker 2: at different parts of the New Zealand market Auckland and

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Speaker 2: christ Church and Wellington with the cities of interest. So

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Speaker 2: where that's at right now, I don't know. I can't

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Speaker 2: help you with that one.

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Speaker 1: All right, Patrick, You've helped us with a lot more

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Speaker 1: than that, so I appreciate your time. Patrick, Noon, Men director,

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Speaker 1: former managing director, I should say cost code.

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Speaker 2: For more from Hither Duplessy Allen Drive.

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