EU-style tariff 'could be advantageous' in New Zealand

Retail NZ says New Zealand should consider matching the European Union's flat €3 fee which is being applied to each and every retail product exported to the region.

The tariff, put in place from the beginning of this month, was intended to level the playing field with low-cost global manufacturers like Temu, which undercut retail prices by selling direct to consumers at wholesale prices.

Retail NZ chief executive Carolyn Young said such a tariff could help protect the local retail market.

"And this tariff that they are putting in place in the EU is similar to things they are doing in South Africa," she said.

"What Europe has done gives us an indicator of what could be done elsewhere and certainty something that could be advantageous in New Zealand."

Young said New Zealand retailers generated more than 90 percent of their sales in the local market and would also benefit from greater border protection.

Still, freight software firm Starshipit's chief operating officer Abi Bennett estimated hundreds of New Zealand retailers exported products to Europe.

She said the tariff was just another cost for retailers to deal with.

"While the European Union's new customs changes are explicitly designed to curb ultra-low-cost global marketplaces, New Zealand retailers exporting directly to European consumers are caught in the crossfire," she said.

Bennett said retailers were already dealing with tighter margins and increased shipping complexity driven by rising international fuel prices, tariff volatility, stricter customs requirements, and increases to fulfilment costs.

"A three-euro charge sounds small on its own, but because it can apply per item or line item rather than simply per parcel, the costs can compound quickly.

She said many small and medium-sized e-commerce brands do not possess the financial or operational wiggle room to absorb the additional customs charge, which would be tricky to pass on to customers.

"The biggest risk is saying nothing at checkout and letting the customer discover extra costs only once the parcel reaches the border."

She recommended retailers be upfront about the new charge.