When we announced last week that The Hobbit was officially greenlit by Warner Bros., a conflict between the New Zealand actors union still needed to be resolved before production could begin on the island. The Press of New Zealand is now stating that The Hobbit will shoot outside of New Zealand since there seems to be no end to the conflict between the unions and the studio. Here's what director Peter Jackson had to say:

"The damage inflicted on our film industry by [the actors unions] is long since done. The move has undermined Warner Bros. confidence in the industry and they are now, quite rightly, very concerned about the security of their $500m investment. Next week, Warners are coming down to New Zealand to make arrangements to move the production offshore. It appears we cannot make films in our own country even when substantial financing is available."

While the decision ultimately rested with Warner Bros., Robyn Malcolm, a committee member of the Actors Equity union stated, "It would have nothing to do with Actors Equity." Here's what else she had to say:

"The difference is I'm a hobbit, you're a hobbit, you come from America or England and you work on the same production, side by side, and we work under completely different terms and conditions. Is that fair?"

New Zealand Economic Development Minister Gary Brownlee is said to be meeting with Warner represntatives next week to try and hash out an agreement. Brownlee disputed claims that the production was leaving the country due to higher tax incentives offered by other countries:

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"I don't believe financial incentives are the issue here. I think it would be wrong to allow people to suggest that it is the money issue that is behind all this. It is not. Let's be very clear: some weeks ago, The Hobbit was being made in New Zealand. An Australian union [The Media, Entertainment and Arts Alliance (MEAA)], with the blessing of Actors' Equity, put a don't work ban on the picture. That don't work ban got lifted last night in a state of absolute panic because the union were going to have a meeting in Wellington and it was going to be picketed by people telling them that they didn't support them. I think what is at the heart of this is the employment arrangements, the industrial relations, not the dollars of incentive, and anyone suggesting otherwise is seriously mistaken.''

Council of Trade Unions president Helen Kelly stated that Warner Bros. and Sir Peter had known since the weekend that this ban had been lifted:

"We've obviously had a pathway to resolve this dispute which Jackson has been involved in and knows about, including that in the weekend they were told that the boycott had been lifted."

We'll be sure to keep you posted with any further developments on The Hobbit and their plans to film in New Zealand as soon as we have more information. In the meantime, you can CLICK HERE to read the site's in-depth article on the matter.