Supermarkets test Enza monopoly

By PHILIPPA STEVENSON

Enza will bolster returns to loyal apple producers as claims grow that the new export consent regime is being taken over by powerful overseas supermarket chains.

Industry sources last night claimed at least one large supermarket chain - an existing Enza customer - had applied for an export permit.

If successful, the move could lead to other supermarkets following suit, heavily eroding both Enza's position as the dominant exporter of New Zealand pipfruit and growers' returns.

Yesterday, Enzafruit executive chairman John McCliskie said a promised $25-million capital distribution to shareholders would not be made when the new Enza Ltd was established under deregulating legislation on April 1.

Instead, $20 million would be used to offset historical costs from bad foreign exchange dealings and the redundant, pre-container shipping loading system at the Napier port. That would effectively boost suppliers' returns by $1.20 a carton.

The move comes as Enza predicts that the 1.3 million cartons of fruit the Export Permits Consents Committee has so far granted to independent exporters will damage the industry overall and hurt individual growers.

"We are alarmed at the extent of the permits process and we have every reason to believe most of them will be targeting our existing customers," Mr McCliskie said.

Enza had little detail from the committee but had deduced the effect from information from customers and consent applicants, he said.

The committee's regulations provided for it to approve consents complementary to Enza. Mr McCliskie said there were indications that the committee had failed the test but Enza did not wish to spend time and money taking legal action now. It could in the future.

Yesterday, spokesmen for the growers said the situation was causing consternation.

Pipfruit Growers chairman Phil Alison called on Agriculture Minister Jim Sutton to halt the process immediately.

"We bought one package and we got something completely different."

United Fruit's Bill Lynch said: "People are coming in and looting the market. Huge despondency is growing by the hour."

However, Mr Sutton said he was increasingly impatient with attempts to put pressure on the permits committee which had hardly been reckless on the basis of the volumes approved so far.

"To stop the committee now would be an act of extreme bad faith to those who have applied for permits, many of whom have already been exporting pipfruit legally and without undermining Enza, and to growers who saw an independent committee as a reasonable solution to the dissension."

But West Coast-Tasman MP Damien O'Connor, who chairs Parliament's primary production select committee, said the last Government had pushed through legislation setting up the committee "in the knowledge that it would drive deregulation. A deal was done and, unfortunately, in hindsight it wasn't the best for the industry."

Mr Sutton will brief the select committee on the permits committee today.

Many growers hit by last year's bad returns had budgeted on the one-off payment of several thousand dollars, which resulted from the sale of Frucor Beverages.

Some will suffer at the loss but because many will export with both Enza and independent operators, the effect of the payment on a supply basis is hard to quantify.

The acting chairman of the export permits committee, Jim Scotland, declined to comment.