As international kiwifruit marketer Zespri prepares to welcome its first shipment of new-season kiwifruit from New Zealand to Europe at the Port of Zeebrugge this Thursday, speculation about the possibility of leading post-harvest companies staging a joint takeover of the company has been flatly denied. Despite suggestions to the contrary, the country's major post-harvest operators insist that on-going discussions with Zespri to streamline the supply chain should not be confused with a desire to launch any kind of buyout.
Rumours of such a move have abounded after comments attributed to Andrew Fenton, chairman of post-harvest operator Satara, appeared in the New Zealand press. Speaking at the group's AGM last week, Mr Fenton reportedly suggested the possible formation of a grower-controlled "mega company" which might "take ownership of Zespri and truly control the supply chain from orchard to market".
But Satara CEO Murray Gough told Eurofruit Magazine there were no such plans. "This is a classic case of words quoted out of context," he said. "Mr Fenton commented on the need for cost reductions and suggested the New Zealand kiwifruit industry might be more cost effective if Zespri and post-harvest operators were all part of the same large, integrated company. The comments have been blown out of all proportion."
Speaking to Eurofruit Magazine at the start of the week, Zespri chairman Craig Greenlees said greater integration was by no means out of the question. "We are acutely aware of the current economic reality confronting our growers and suppliers, so a call for further integration doesn't come as a surprise," he said. "Zespri is a 100 per cent-owned grower organisation, with grower representation on the board and growers involved in major industry decisions through consultation groups and New Zealand Kiwifruit Growers Incorporated. However, this doesn't mean there isn't room for further integration and this is part of an ongoing discussion within our industry."
Zespri has faced strong criticism from the post-harvest sector during the past month over its alleged failure to address the problem of rising costs and to streamline the supply chain, measures which a significant number of industry operators feel are necessary in order to cope with adverse trading conditions and to reverse a recent fall in returns to growers. Three weeks ago, the heads of New Zealand’s four leading kiwifruit post-harvest companies – Te Awanui Huka Pak, Satara, Eastpack and Seeka Kiwifruit Industries – wrote to the Zespri board demanding that more be done to deliver cost savings, stating that an estimated 35 per cent of growers are now failing to cover their production costs.
Mr Greenlees told Eurofruit Magazine that Zespri remains committed to achieving cost savings. "The Zespri board has taken a leadership role to encourage the reduction of costs throughout the industry and to extract further value from current initiatives and future investment," he said. "A number of initiatives have been identified, and these projects include improvements to sales and operations planning, packaging and labelling, fruit quality issues, supplier cooperation and orchard profitability. They are not short-term projects and require detailed analysis and testing to ensure we do not compromise long-term value."
With Zespri expecting its earliest ever arrival of New Zealand kiwifruit in the European market this week, the firm is anticipating a strong start thanks to a smaller overhang of Italian fruit.