Kiwifruit heavyweights in court over export rules

Turners & Growers has taken action against Zespri over fruit export restrictions. File photo / NZ Herald

The trial between kiwifruit rivals Zespri and Turners & Growers started at the High Court at Auckland yesterday.

Listed company Turners & Growers has taken action against Zespri because it wants to be able to export its kiwifruit varieties without restriction. Under industry regulations, Zespri controls exports to all countries other than Australia.

Through this model, Zespri has promised to triple export earnings to at least $3 billion by 2025.

Turners & Growers claims a collaborative marketing system set up more than a decade ago had become a licence for anti-competitive behaviour.

A hearing held in July was to determine whether the High Court had the jurisdiction to decide whether Zespri has breached regulations.

The trial that started yesterday is expected to last five weeks.

Yesterday, the media was barred from court for the majority of the proceedings, due to commercially sensitive details that were discussed.

Zespri director of corporate and grower services Carol Ward said last year that the current industry structure was proving successful for growers.

"Over the last decade there's been a doubling in export earnings; we've hit $1 billion of export earnings last year.

"So not only do the growers support it but I think it's really demonstrating that it is successful."

The Zespri Group is the only company authorised under the Kiwifruit Export Regulations to export kiwifruit from New Zealand to markets other than Australia.

Subsidiary Zespri International is the group's international marketing arm.

There are two main types of kiwifruit grown in New Zealand - one is a green variety known as Hayward kiwifruit, which makes up 80 per cent of New Zealand's kiwifruit crop and is not subject to any intellectual property protection.

However, a gold fleshed variety that makes up 20 per cent of kiwifruit grown in New Zealand is protected by Zespri in name and supply - Zespri's grower licences require growers to supply all fruit from this cultivar to Zespri.

The case continues today.