It has been revealed that the High Court will hear the case put together by New Zealand export group Turners & Growers (T&G) against kiwifruit giant Zespri on 1 November this year, with the hearing expected to last for five weeks.
It follows a move in July 2009 by Turners & Growers Limited, and its wholly owned subsidiaries Turners & Growers Horticulture Limited and Enza Limited, to file proceeding in the Auckland High Court against Zespri Limited and its subsidiary Zespri International Limited.
T&G has brought about proceedings based on a number of claims, including:
– The Kiwifruit Export Regulations 1999 – giving Zespri a monopoly over exports of kiwifruit with the exception of Australia – is unlawful, because it is inconsistent with the Commerce Act 1986 and the New Zealand Bill of Rights Act 1990.
– Zespri has abused its dominant position for the purpose of protecting its monopoly after the deregulation of the kiwifruit industry by seeking to tie growers, suppliers and post-harvest operators into exclusivity contracts, by attempting to take control of the supply of kiwifruit for export to Australia, and by attempting to take control of new kiwifruit cultivars.
– Zespri has unlawfully discriminated among suppliers of kiwifruit by paying more for kiwifruit supplied by growers who are prepared to sign exclusivity agreements with Zespri, in an impoper attempt to preserve Zespri's monopoly.
– Zespri has unlawfully carried on businesses and activities prohibited by the Kiwifruit Export Regulations 1999, without obtaining the approval of shareholders and suppliers.
Deregulation of the single-desk export system currently operated by the New Zealand kiwifruit industry has longbeen the stated aim of T&G.
'We want the right to grow our own varieties in New Zealand andexport them ourselves,” T&G managing director Jeff Wesley toldFruitnet.com in 2009. 'Zespri is the last of these single-desk export dinosaursin the world, and the World Trade Organisation wants them phased out by2013.'
However, Zespri CEO Lain Jager has in the past hit back at the claims, calling the lawsuit an unfocusedpublicity stunt.
'Obviously the publicity is part of their campaign to destabiliseand deregulate the industry,' he said last year. 'It seems they’re suingeveryone about everything. It's a scattergun approach.
“It seems to us they’re just unhappy with the regulations. There’s noappetite from growers to see a change, however,' said Mr Jager, addingT&G represent only 1 per cent of the industry. 'On that basis theycan’t expect to dictate industry strategy.'
Zespri can point to the results of an independent survey conducted in February this year to gauge theviews of New Zealand's kiwifruit growers towards existing industrystructures, which revealed strong support for its single-desk status and for the overall performance of both Zespriand industry body New Zealand Kiwifruit Growers Inc (NZKGI).
Some 90 per cent of the 500 growers polled in the survey, which wasconducted by market research firm Colmar Brunton, agreed that Zespri'sspecial marketing status as a single point of entry (SPE) was criticalto the future success of New Zealand's kiwifruit business.
However, Mr Wesley said that 'grower sentiment' would not change whathe saw as a continuing decline of orchard gate returns for Zespri Greenkiwifruit growers in particular, adding that many could be driven out of the industryunless they could convert to 'lucrative new varieties'.
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