Korea Fair Trade Commission investigates Zespri

Strained relationships between Zespri and Chilean kiwifruit exporters could be behind an investigation by the Korea Fair Trade Commission (KFTC) into aspects of Zespri's arrangements with some of the big Korean supermarket chains.

The tension between the two southern hemisphere kiwifruit producing nations was hinted at during Zespri's agm last month when the Bay of Plenty Times reported that CEO Lain Jager said relationships between the New Zealand and Chilean kiwifruit industries were currently a little strained.

"The Chileans are a bit grumpy with us," he told the meeting in response to a question from Katikati grower Ross Hart who asked why Zespri staff went to Chile in June. Mr Jager said Zespri made regular visits to speak to the Chilean industry because even though the two countries competed in the market place, they did have shared interests.

Zespri chairman John Loughlin said it was inevitable the two industries would at times "get in each other's way" in the market place, creating some tensions.

New Zealand competes head on with Chilean fruit in the market but Zespri fruit earns a premium over that from Chile.

Zespri spokesman David Courtney confirmed the Korean investigations were underway and that growers had been informed at the recent round of meetings throughout the country.

"We are competing strongly with Chile in Korea, particularly given the cost advantage our Chilean competitors enjoy over New Zealand kiwifruit with an 11 per cent tariff compared to the 45 per cent tariff that applies on New Zealand kiwifruit," he said .

"We informed growers of the potential remedies if Zespri was found to be in breach in any way - one of the remedies is a penalty which we estimate could be as high as $US160,000.

"To put this in perspective the KFTC conducts over 2000 of these sorts of inquiries a year," he said.

"Zespri is assisting the KFTC in its inquiries, and we are awaiting their initial report. Once we have their report we'll have an opportunity to respond to any issues they identify.'

Zespri sells kiwifruit in 60 countries around the world and from time to time issues arose in markets he said.

"Our reputation is important to us and we seek to act in accordance with local laws in all of the markets in which we trade.

"We are reluctant to comment further at this stage as the matter is subject to the KFTC investigation," he said.