Growers want a monopoly, says Zespri

Zespri says it will consider an economic report recommending its monopolistic position be removed but will not be pursuing deregulation because it is not what growers want.

The kiwifruit exporter yesterday responded to a formal call by Turners & Growers to strip it of the monopoly status which allows Zespri to control all kiwifruit exports to countries other than Australia.

Turner & Growers, headed by Guinness Peat Group's Tony Gibbs, has sent a position paper to the Government calling for Zespri's privileged position to be done away with, citing abuses of market power and potential loss of export and research and development dollars if it is allowed to continue.

Along with its paper the listed produce company filed an independent report by economic consultants NERA calling for Zespri to be deregulated to maximise the prospects of innovative gains in the industry by allowing more than one commercial strategy beyond the orchard gate as well as increasing the ability to inject additional capital into R&D.

Zespri director of corporate and grower services Carol Ward said the company was interested to see what value the NERA report might offer to improve the industry's productivity, market penetration, presence and profitability.

But she said deregulation was not an option.

"The suggestion to deregulate the kiwifruit industry is not supported by growers, the post-harvest sector, the company's international marketing experts or Government, and is therefore not on the agenda."

Ward said Zespri would be happy to talk to Turners & Growers about developing additional collaborative marketing efforts but also berated the company for punching above its weight.

"Like any Zespri supplier and shareholder, Turners & Growers has a role to play in the kiwifruit industry, but a 1 per cent player cannot expect to determine policy for the whole industry."

Zespri's view was backed by growers.

Peter Ombler president of the NZ Kiwifruit Growers Incorporation, which represents the 2800-grower industry, said growers had made it clear what they wanted.

"We have a very clear mandate from our grower base that they are comfortable with the current structure."

Ombler said a poll of growers in 2007 found 84 per cent believed the current structure was fundamental to their survival and a further 10 per cent agreed it was important.

"We are constantly in contact with growers and we have seen nothing to suggest that position has changed."

Ombler said growers were happy because the industry had been successful and there was nothing to suggest it would not be successful in the future.

Ombler believed the monopolistic position of Zespri encouraged R&D rather than blocking it.

"We have the world's biggest plant-breeding programme - the success of the gold [variety] is well documented."

Agriculture and Forestry Minister David Carter said deregulation of the kiwifruit sector was not at present on the Government's agenda but it would be guided by what the majority of growers wanted.

"As far as I am concerned they [growers] own the industry."

Carter said if it was clear the majority of growers thought there was a better way to run the kiwifruit industry, "we would certainly be prepared to look at it".

"Likewise if the majority wanted the status quo that would sway me considerably."