Westland Milk Products in New Zealand
Founded in 1937, Westland Milk Products in New Zealand is a leading independent co-operative dairy company, owned by over 425 farmer shareholders that supply milk for processing. In the video we watched, it was evident that Westland had started as a small independent dairy farm and has grown into a significant competitor within that industry. Most significantly, Westland has expanded their product offerings from simple dairy products to include nutritional supplements made from dairy processing.
Discuss the sources of comparative advantage that would have led to the original success of the Westland Milk Products company. How did sources of comparative change over time and how did that likely influence the plans for Westland’s production?
Suppose the New Zealand government created a policy that would give tax incentives to exporters of infant and toddler nutritional dairy products (which Westland currently produces for their domestic customers). What concerns would Westland need to discuss before deciding to take advantage of this government subsidy? Explain your answer fully, providing any recommendations you may have regarding the effects upon Westland and the local and global economies.