There are concerns the government's new procurement rules could be taking legitimate business away from those who aren't Māori.

Midge Holding is the co-owner of the small makeup company Minifies in Christchurch.

Since she took over the business in 2009, she has been supplying fake blood and other special effects to the New Zealand Defence Force.

Now, under the new procurement policy, mandated agencies have to award at least five percent of their yearly contracts to Māori businesses.

Midge then received a letter from the Defence Force asking her to provide proof if Minifies is a Māori owned business, which it isn't.

Midge Holding told Mike Hosking her company has been supplying the Defence Force for 12 years and there has been no issue up until this point.

“They’ve got no reason to go elsewhere, but they may because we aren’t a Māori business.”

LISTEN ABOVE