Who sells? Regulator decides

Zespri can oppose would-be exporters' plans. Photo / Alan Gibson

Zespri, despite many claims to the contrary, is not, strictly speaking, a monopoly - but it comes close.

Other entities can export kiwifruit to Australia and, the regulator Kiwifruit NZ New Zealand (KNZ) points out, to other markets too. But beyond Australia, other exporters must collaborate with Zespri. It's the regulator's role to keep Zespri honest and ensure licences are granted that will benefit all growers.

There are 12 NZ exporters servicing foreign markets in collaboration with Zespri. One is Turners & Growers, which is renegotiating renewal of its licence to export to the Pacific Islands.

Kiwifruit NZ chief executive Richard Procter points to past decisions on applications for collaborative marketing licences as evidence of the body's independence.

Since 2005 Zespri has opposed 52 out of of 149 applications. Kiwifruit NZ approved 22 of the disputed applications, or 42 per cent, over Zespri's objections. In all it has granted 80 per cent of applications and only 5 per cent are appealed. No appeal has succeeded and no exporter has sought a judicial review.

But T&G's Tony Gibbs says seeking judicial oversight would be pointless as "the opportunities in question would already have passed by the time the High Court could issue a decision. T&G is left, effectively, without a remedy".

Another gripe concerns Zespri's ownership structure, which, Gibbs argues, is weighted to benefit the status quo, which he considers corrupt.

The industry is grower-owned, counters Peter Ombler, chief executive of the grower organisation NZ Kiwifruit Growers Inc.

That may be so, but it's a funny old structure. Zespri shares can only be bought by growers, but not all shareholders are orchardists. That is because some have sold their orchards but kept their shares, Ombler explains.

More than 90 per cent of shareholders are growers but share ownership is not necessarily aligned with fruit production - members can buy extra shares, but can only vote those shares that are aligned to production.

This latter point is the crux of Gibbs' complaint - KNZ controls who can export and therefore determines who holds voting shares (as growers don't want to produce more fruit than they can sell). In his view, KNZ and Zespri are too closely aligned. This situation, he alleges, allows Zespri to rort the system and exclude reformers.

Ombler, naturally, disagrees: "Growers are involved with every committee, are on the board, and have input into what happens."