I'd heard through the rumor mill that there had been animal deaths and that people weren't happy and suspect that the frantic denial of any wrong doing has a lot more to do with the absolute panic PETA can cause any movie stupid enough not to take care of their animals.
Pet people can become vicious and PETA as a lobby group have an enormous amount of influence. If they don't like what happened to animals involved in the Hobbit, they will declare open war on us when they find out what we do to caged chickens and pigs.
Did these animals get abused? Well based on the appalling way Peter Jackson treats his human workers, it doesn't seem that much of a stretch. You can see they are actually concerned by this with a counter media strategy that would make the IDF jealous, Jackson banned a RNZ journalist from attending the opening because their reporting wasn't sycophantic enough.
NZers recently surveyed showed that the Hobbit stirred a lot of criticism from many of them. The manufactured crisis at The Hobbit where Key and Jackson sang in unison that it was all the actors union fault turned out to be an utter falsehood once Peter Jacksons emails were released under the Official Information Act that showed it wasn't the Actors union who were the problem at all.
I think NZers felt they had been conned when Key re-wrote labour laws for Warner Bros and they turned a bit sour over Jackson as the constant promotion of his business started looking less patriotic and more cronyism.
The anti-union hysteria dutifully whipped up by the mainstream media was so ferocious you would need to go back to the 51 lockout for a recent example.
The problems with basing NZ's entire marketing image on a semi-racist Aryan fantasy written by a potty English professor was never really considered. It's happened because Key and Jackson are mates and because NZ needed to move away from 100% Pure because Key's Farmer mates have polluted our rivers so much so that we are more 40% pure, 60% cow shit now.
NZ - 100% Middle Earth Animal Abuse doesn't seem like an attractive tourism slogan now does it?