Zespri signs Asia deal with old foe

WORKING TOGETHER: Zespri chairman Peter McBride (left) and T&G Global chairman Professor Klaus Josef (right) in Berlin. PICTURE/SUPPLIED

Kiwifruit exporting organisation Zespri and German-owned New Zealand fruit exporter T&G Global have signed a Memorandum of Understanding (MOU) on a new collaborative marketing agreement in selected Southeast Asian markets.

Zespri chairman Peter McBride and Professor Klaus Josef Lutz, chief executive of T&G's controlling shareholder BayWa, signed the MOU yesterday (NZT) at the fruit industry trade show Fruit Logistica in Berlin.

The collaboration signals a remarkable turnaround in the relationship between T&G - formerly Turners and Growers - and Zespri. Under the Kiwifruit Regulations, Zespri is the primary exporter of NZ-grown kiwifruit beyond Australia. However, other exporters can apply to regulator Kiwifruit NZ with proposals to export NZ-grown kiwifruit under collaborative marketing arrangements with Zespri.

Under its former owner Guinness Peat Group, Turners and Growers brought legal action challenging Zespri's export monopoly. T&G had planned to appeal a 2010 High Court ruling against it that upheld Zespri's market dominance, but in 2011 abandoned the challenge, citing the industry disruption caused by bacterial disease PSA. In 2012, BayWa became the majority shareholder and subsequently announced it wanted to "bury past history" and collaborate with Zespri.

A Zespri spokesman said the change of ownership had provided an opportunity to reconsider the relationships, and the two companies had begun conversations around how they could they work together to leverage each other's strengths in various markets around the world.

At this week's signing, Professor Lutz said that, as two large New Zealand horticultural exporters with strong global brands, Zespri and T&G had committed to develop market opportunities together to grow export sales. "This is a positive collaboration between two large New Zealand exporters."

Mr McBride said both companies were major contributors to the New Zealand economy and offered premium branded products supported by innovative marketing.

"This MOU formalises our intentions to look for opportunities to use our respective strengths to grow sales," said Mr McBride.

The first step in this collaboration is regulatory approval by Kiwifruit NZ of a new initiative under which the two companies will work together to sell about one million trays of Zespri Kiwifruit in Thailand, Cambodia, Myanmar and Laos in the 2016 season.

"This proactive collaborative marketing partnership will accelerate the growth in kiwifruit sales across a region with huge potential," said Mr McBride.

"T&G will develop sales programmes for Zespri Green, Zespri SunGold and T&G products in these four Southeast Asian countries, leveraging the strength of the Zespri brand and marketing strategy with T&G's existing business expertise, distribution channels and strong product offering."

T&G will open an office in Bangkok to represent and support the two companies' sales programmes. The new team will work together to grow sales of both Zespri and T&G branded products like JAZZTM and ENVYTM apples in the region, with a regional manager already appointed and key account managers appointments to follow.

This collaborative arrangement is the first of its kind to be approved by the regulator and learnings from the programme would be used to inform future collaborative programmes, said Zespri.

Mr McBride said the recent Kiwifruit Industry Strategy Project (KISP) consultation with growers heralded a change in direction for Zespri and collaborative marketing.

"This has opened the way for Zespri to partner with companies which can offer strong coverage in new or developing regions for Zespri and increase returns to our growers."

Zespri general manager grower & government relations Dave Courtney said Zespri was looking for areas of the world where it could work more proactively with other exporters and use their strengths. T&G had a strong presence in the Southeast Asian markets covered under the initial agreement, he said.

"These are key markets for us. We want to grow there, but we don't have a large footprint in those markets. So it's case of working together to use our brand and marketing expertise and their distribution networks and experience and knowledge."