Zespri facing WTO questions

| Tuesday, 24 Nov 2009

Turners and Growers executives running a campaign to break down the single-desk platform for kiwifruit exports appear to have ambushed the growers' marketer at the World Trade Organisation.

WTO talks in Switzerland look set to eliminate the Canadian Wheat Board's single marketing desk by 2013 -- leaving New Zealand's Zespri International as the last of its kind.

Zespri is the only other "notified" agricultural exporting state trading enterprise (STE) in the developed world. It does not receive government subsidies and has an exemption from the proposed regulations concerning STEs.

But Turners chairman Tony Gibbs today said the United States delegation at the WTO had lodged a question related to his court action in NZ against Zespri International's single desk status.

"We request that New Zealand please provide information on why it is that a key player in the New Zealand kiwifruit industry had to file legal proceedings in relation to collaborative marketing arrangements," the Americans said.

"Additionally, we request that New Zealand please expand on the court documents alleging anti-competitive behaviour and abuse of Zespri's dominant position".

Turners and Growers is controlled by corporate raider GPG, which led the attack that acquired the apple industry's Enza company from orchardists in 2000, and Mr Gibbs absorbed Enza into Turners and Growers.

He has criticised Zespri control of export markets outside Australasia, and complained that Kiwifruit New Zealand had allocated Turners and Growers only 1.3 per cent of the 2009 export fruit for collaborative marketing.

Turners wants to grow and export its own Enza red variety in New Zealand, though it is already being grown and sold commercially offshore.

But Zespri has insisted that new cultivars that show significant commercial potential should be assessed on their ability to perform in a range of climates, susceptibility to pests and disease, and the consistency of yield and fruit quality.

Skipping such testing to commercialise directly would create a high chance of market failure, according to Zespri.

Turners has taken Zespri to court, alleging anti-competitive behaviour in the $800 million kiwifruit trade. "We believe that it's abused that monopoly, and the Zespri monopoly should end," said Mr Gibbs.

Now he has highlighted the US question, in the context of New Zealand seeking a trade deal with the United States. "Here we are looking for free trade, and here we have the world's last monopoly," he said. Zespri has simply said the legal action against it is a publicity stunt.

And Trade Minister Tim Groser has said Zespri's dominant position is likely to remain as long as the majority of kiwifruit growers continue to support it.

Mr Gibbs has said the 1999 reforms that created the single desk were only intended to be an interim measure, but the then National-led government's food and fibre minister John Luxton said at the time that a single kiwifruit marketing desk should continue "without a sunset clause".

-NZPA