Avocado grower to leave venture

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Just Avocados will exit the collaborative joint venture avocado marketing entity Avanza.
Just Avocados will exit the collaborative joint venture avocado marketing entity Avanza.

Just Avocados is exiting the collaborative joint venture avocado marketing entity Avanza and will relinquish its one-third shareholding.

"Differing commercial philosophies and growing competitive tension onshore for supply are key reasons for us looking to do things differently," said Just Avocados director Andrew Darling.

"However, the most compelling commercial reasons are around improving our grower returns."

The Bay of Plenty-based company, which announced its decision late last week, said the exit would take effect before the upcoming harvest season, which begins in late August.

Just Avocados joined Avanza in 2010. Avanza was set up to export to countries outside New Zealand's major market Australia.

The other shareholders Southern Produce and Primor Produce, who were formerly competitors, now jointly market and export through their Avoco joint venture, set up in 2013. Avoco will become the 100 per cent owner of Avanza.

Mr Darling said Avanza had been an outstanding vehicle by which the three shareholders had come together to develop new market opportunities in Asia.

"Moving forward, the industry has developed and matured to the extent that Just Avocados, as the smallest of the three supplying companies, believes now is the right time to effectively paddle its own canoe," he said.

Mr Darling said that reducing cost and optimising market returns would be key drivers in providing greater and better outcomes for its growers than was possible under the current model.

Immediate attention would be given to ensuring the separation was as orderly as could be achieved, in an effort to not lose any of the market gains realised by the collaboration, he said.

Just Avocados remained committed to the industry strategy around continuing to develop new markets.

"We will be committing similar volumes to Asia in the coming season," he said.

New Zealand Avocado announced last week that the industry had produced 4.2 million trays in the 2015-16 season, down on 7.1 million trays the previous year, but expected to be back up to 7 million-plus trays for 2016-17. Short supply saw about 80 per cent of the past season's export crop committed to the high returning Australian market.

Avoco director Alistair Young said the main message was that the remaining shareholders were going to continue the Avanza mission and drive into markets outside of Australia.

"And we're going to be actively seeking more like-minded growers to keep the Avanza mission going strongly."

Avoco/Avanza:

* Avoco is the trademark of the New Zealand Avocado Company, co-owned by exporters Bay of Plenty-based Southern Produce and Auckland-based Primor Produce. Avoco and Just Avocados were the shareholders in the Avanza export marketing channel, which exports to markets outside Australia.

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