Zespri signs China deal
Kiwifruit giant Zespri has signed the beginnings of a commercial deal with a state-owned Chinese firm, in hope of buying counterfeit golden kiwifruit grown on vines stolen from the company.
The bid to buy into an estimated 4000 hectares of unlicensed SunGold kiwifruit in China is yet to be signed off by Zespri’s regulator. But, with China’s growing season on the horizon and the volume of counterfeit fruit expected to grow, there is pressure for a deal that could save Zespri’s sizeable stake in the Chinese market.
The company has in recent weeks signed a ‘‘memorandum of intent’’ with a Sichuan-based company, signalling a willingness to provide technology and advice to Chinese growers of kiwifruit vines that were stolen from Zespri. The arrangement has been touted by Zespri as a ‘‘win-win’’ for both New Zealand and China.
A statement about the trial, published on an industry website in November, said the three-year co-operation project between Zespri and Sichuan State-owned Assets Operation and Investment Management would begin next year. The statement said the project, if successful, could expand to the production of 50,000 tonnes of SunGold within five years.
‘‘We hope that with our worldleading management technology and best practices, we can help Chinese growers improve their growing techniques and increase their income,’’ Zespri chief executive Daniel Mathieson was quoted as saying.
A statement provided by Zespri, attributed to the company’s China strategic projects lead Matt Crawford, said the growing of unauthorised SunGold was an ‘‘immense challenge’’. The memorandum of intent was a ‘‘symbol’’ of the company’s willingness to run the trial, which would begin with Zespri buying 650 tonnes of fruit from Chinese growers in its first year. Zespri would then brand the fruit and sell it to Chinese consumers. The company was working with a supportive Chinese Government, Crawford said, and continued to pursue some growers through the Chinese courts and enforce its plant variety rights.
It had not decided whether it would try to license the growers in China, as it does with New Zealand growers. ‘‘The consistent advice we have received is that the best way to managing the unauthorised SunGold kiwifruit issue is to find a win-win solution and we see this as a real commercial opportunity.’’
Zespri, at its annual meeting in August, said there were now an estimated 4000ha of SunGold being illegally grown in China.
At $161,660 in returns per hectare, this could amount to more than $645 million worth of counterfeit fruit that would come on to the Chinese market in August – competing with lateseason New Zealand fruit.
Crawford said the company hoped to progress the deal ‘‘as soon as possible while following the appropriate processes’’.
Zespri has a ‘‘single desk’’ monopoly, meaning all kiwifruit growers must sell their fruit to the company for marketing and export. Because of this market dominance, Zespri’s operations are regulated by Kiwifruit NZ and the Kiwifruit Export Regulations. The law says Zespri is legally confined to marketing and developing the market for New Zealand-grown fruit.
Kiwifruit NZ chief executive Geoff Morgan said the proposed arrangement with Chinese growers was outside Zespri’s ‘‘core business’’ and required sign-off from Kiwifruit NZ.
Morgan said Kiwifruit NZ, as per the law, would decide whether the project supported Zespri’s core business and was low-risk to growers. A draft decision is expected in January.
‘‘We hope ... we can help Chinese growers improve their growing techniques.’’
Daniel Mathieson Zespri chief executive