Kiwi growers get the pip

Tod Rutter of Te Puke is uncomfortable with the "cosy" relationship between kiwifruit growers and Zespri. Photo / Martin Sykes

The kiwifruit growers' organisation is to review how its $500,000 annual funding is sourced, in a sign Turners & Growers' bid to destabilise dominant exporter Zespri's hold on the $1 billion industry may be hitting home.

New Zealand Kiwifruit Growers Inc, which represents the country's 2700 growers, last financial year received $520,000 from Zespri for running costs. In reality the money comes from fruit sales and Zespri is the payment vehicle.

But for some growers such as Te Puke's Tod Rutter the system is not a good look for a group created and paid to represent growers' interests. He is uncomfortable with the "cosy relationship" between NZKGI and Zespri and wants the grower group's funding system restructured so it is "fully independent". Failing this he wants a new growers' organisation started.

NZKGI president Peter Ombler said a review of the group's funding system was "on the table for discussion" after questions from "a minority" of growers. It would be debated in the next couple of months. But there was little appetite for another funding system such as a grower levy, he said.

Listed fresh produce grower, marketer and exporter Turners & Growers, a kiwifruit grower of around 1 per cent of the industry, this year launched a campaign to end Zespri's statutory export monopoly. Led by its chairman, apple industry stormtrooper Tony Gibbs, T&G has lobbied the Government, started legal action and blitzed growers with documents questioning how well Zespri is performing on their behalf and suggesting it is self-interested at their expense.

T&G, which claims to have been repeatedly blocked by Zespri in attempts to open new export markets, has struck when growers of green fruit are struggling to make economic returns and were earlier asked by Zespri to let fruit rot on the ground.

Te Puke's Rutter, a grower for three years with an accounting and banking background, said he had no connection with T&G's campaign, but had questions about the way the industry operates after a devastating hailstorm in May. Rutter said he received minimum compensation from the industry, which funds its own compensation scheme. When he approached NZKGI for help he was told it did not represent individual growers.

He was also unhappy with the compensation appeals process after the hailstorm, saying it was not independent enough, and is concerned that NZKGI shares a Mt Maunganui building and facilities with Zespri.

Ombler said the hailstorm was estimated to have caused just under $10 million damage to Western Bay of Plenty crops. The industry provided around $6.2 million compensation, including a $520,000 voluntary contribution from other growers. Ombler fully understood Rutter's dismay over his financial losses but said the grower had been treated as well as others. Rutter had turned down opportunities to discuss the matter further with NZKGI, Ombler said.

Grower contributions to industry activities were decided each year by orchardists, Zespri and suppliers under an industry "supply agreement", Ombler said. This was how it was decided NZKGI funding should come through Zespri from fruit sale pools.

"What makes us different from other industries is that we are in it together. It would be difficult to have a voluntary levy mechanism."

Meanwhile, Ombler said this year's grower funding for NZKGI would have to cover legal costs incurred in the stoush with T&G.