The move by New Zealand apple growers into high-end varieties has taken its toll on the juicing industry, with T&G Global opting to put its food processing unit T&G Foods on the market due to dwindling fruit supply.
T&G, the fruit marketing firm controlled by Germany's BayWa, said its apple processing business had been hurt by a decline in fruit volumes and a slide in world apple juice concentrate prices.
The company reviewed the unit's operations and determined that it was "non-core" and should be either sold, rationalised or closed.
"Despite the best efforts of T&G Foods' management and staff, the business has struggled to counter the impact of the significant decline in the volume of fruit for processing in New Zealand and the continued worldwide decline in the commodity price of apple juice concentrate," said chief executive Alastair Hulbert.
Depending on the timing and outcome, T&G may incur a significant after-tax loss due to a write-down in the net book value of T&G Foods' assets and other associated costs, it said. At this stage the negative impact to the T&G Group is estimated to be about $14 million.
The company said, however, that any negative impact will be largely offset by a fair value gain of about $14m from T&G Group's investment in Grandview Brokerage announced in March, a joint venture in the US that will improve its access to the American fresh produce market.