All three previous The Lord of the Rings movies were filmed in the country and director Peter Jackson, who will produce the new picture, has urged union executives to reconsider their planned boycott because a relocation would seriously harm New Zealand's entertainment industry.
The stand-off revolves around movie bosses' refusal to sign a deal with local unions amid allegations of "unfair treatment" of performers, and other organisations in America, Canada and Britain have all backed the boycott.
Executives at the movie studios behind The Hobbit have now spoken out to condemn criticism of Jackson and his film crew, insisting they are "exploring all alternative options" to make sure filming goes ahead as planned.
The joint statement from New Line, Warner Bros. and Metro-Goldwyn-Mayer (MGM) reads, "(We) are concerned by the recent allegations of unfair treatment of actors in New Zealand... we believe that in this case the allegations are baseless and unfair to Peter Jackson and his team in Wellington who have been tireless supporters of the New Zealand motion picture community.
"Motion picture production requires the certainty that a production can reasonably proceed without disruption and it is our general policy to avoid filming in locations where there is potential for workforce uncertainty or other forms of instability. As such, we are exploring all alternative options in order to protect our business interests."
The union dispute is the latest in a long line of problems which have hit The Hobbit in recent months - the film is currently on hold due to ongoing financial problems at MGM, and director Guillermo Del Toro quit in May (10) due to the lengthy delays.