Zespri Green kiwifruit

New Zealand Kiwifruit Growers Incorporated (NZKGI) today moved to underline its opposition to Turners & Growers’ government request for the kiwifruit industry to be deregulated.

“New Zealand kiwifruit growers will ultimately decide the future of this industry and there is generally no grower support for deregulation,” said Peter Ombler, the president of NZKGI. “New Zealand growers are the owners of the kiwifruit industry with over NZ$3.8bn invested and the majority of growers are shareholders of Zespri.”

Turners & Growers (T&G) has called on the government to end Zespri’s export monopoly on kiwifruit, branding it a “privileged structure” that prevents free trade and restricts benefits to Zespri shareholders.

In a paper to the government, T&G claims that the current system is not in the best interests of the broader kiwifruit industry, arguing that the absence of competition stifles innovation and capital investment while eliminating choice.

T&G’s position paper - entitled “Releasing the economic potential of the New Zealand kiwifruit industry” - also discusses a long list of grievances where it believes Zespri has “acted unlawfully and disregarded the rules that govern its structure”. In a company statement, T&G said the grievances include “purported collaborated marketing; the dumping of fruit; the branding of Chilean fruit Zespri; loyalty agreements and the abuse of power”.

Competition would give other businesses the opportunity to invest in the industry and investigate new markets and opportunities, T&G argues, potentially increasing returns by hundreds of millions of dollars.

But Mr Ombler’s subsequent statement reveals that growers are far from convinced by the argument for deregulation; not least given the experiences of the past.

“Many growers remember their poor returns a couple of decades ago when there were multiple exporters before growers made the decision to move to the current industry structure with Zespri as the marketer,” he said. “In a recent survey, 84 per cent of growers wanted the current structure retained for their continued success. Ironically, many kiwifruit growers who are also apple growers are most vocal in their support for the current industry structure, following on from their experiences of the deregulation of the apple industry.”

Tuners & Growers formerly presided over the apple export monopoly through Enza, which remains a major pipfruit exporter in today’s deregulated market.

Zespri was established in 1999 as the grower-owned commercial arm of the Kiwifruit Marketing Board responsible for marketing and exporting kiwifruit overseas. Its formation, which followed an industry restructure, meant that only Zespri or New Zealand exporters withcollaborative contracts could sell kiwifruit in export markets outside ofAustralia.

The single-desk system has been in place in the country's kiwifruitindustry since 1987, having been introduced by growers to combatperceived overseas undercutting by exporters that in turn reducedorchard returns.

NZKGI represents New Zealand’s 3,500 kiwifruit growers and it was formed following the downturn in the kiwifruit industry in the 1990s to give growers a voice in industry and government decision making.