Story: Large companies
Large companies have a big investment of capital and many employees. In the 19th century importing was big business, as was banking and finance. By the 2000s many large companies operating in New Zealand were overseas-owned, and many others were previously government-owned companies that had been privatised.
Full story by Gary Hawke
Main image: Frozen Meat Company share certificate
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19th century companies
Most companies in the 19th century were owned by individuals or families. The first big company was the New Zealand Company, established in London in 1839. People who had shares in the company were given land.
Other large companies developed as importers brought in goods which were not made locally, such as tea, sugar and cloth. Companies making shoes, boots or clothes began to grow. Hallensteins made clothes and by 1900 it had 36 retail stores.
From the 1880s exports rose as frozen meat, butter and cheese were produced. Many farmers joined co-operatives to jointly export their produce. Meat-freezing companies were increasingly owned by British meat importing firms.
Ross and Glendining was a Dunedin textile manufacturer. By 1900 it employed over 1,000 people, and owned sheep farms, wool-sorting and scouring operations, a coal mine, woollen mills, and hosiery and clothing factories. Other major companies were the New Zealand Sugar Company, Auckland Gas, the New Zealand Frozen Meat Company and the Northern Steamship Company.
Access to capital
Companies needed capital investment – money – in order to grow. Most of New Zealand’s early companies provided services. There were four overseas banks and two local banks with sizable business in the 19th century. In the late 1800s they each had more than £1 million (around $100 million in 2009 terms).
Insurance companies and stock and station agencies were also important for finance. Wright Stephenson was the most important New Zealand-owned agency. Another national agency, Dalgetys, was English-owned.
At first transport was difficult between settlements, and businesses like breweries were local. When transport improved, these businesses began to be bought out. By the 1930s there were two large brewers, New Zealand Breweries and Dominion Breweries.
Government and investment
The government promoted local manufacturing by licensing imports and charging taxes on imported goods. Local firms assembled cars rather than manufacturing the entire product. The government also sponsored overseas investment such as the Tīwai Point aluminium smelter, which was lured with the promise of cheap electricity, and Tasman Pulp and Paper, which was owned partly by Australian newspapers, and partly by the government.
Large companies often grew through mergers and by buying other companies. In the early 2000s four companies dominated the petrol industry: Shell, BP, Mobil and Caltex. Two companies controlled supermarkets – Progressive Enterprises and Foodstuffs.
Fletchers was a building company that was privately owned by the family until 1940. By the 1980s it was New Zealand’s largest company. But most large companies were owned overseas – such as banks, oil and shipping – or were run by the government – electricity, coal, forestry and railways.
In the 1980s the government began reducing taxes on imports and abandoned import licensing. They made it easier for banks to borrow overseas. Aggressive companies like Brierley and Chase bought shares in companies then sold off their assets or restructured them. Ready credit created a finance bubble and there was a crash in 1987.
The government sold some state-owned businesses such as Telecom, and turned other government agencies into profit-making state-owned enterprises. The electricity company Contact Energy, sold by the government in 1998, was the largest company on the stock exchange in 2007. Another very large company was the farmers’ co-operative Fonterra, which was owned by its members and not listed on the stock exchange.