Enza return in line with growers' fears

John McCliskie

By PHILIPPA STEVENSON agricultural editor


Apple marketer Enza has made a predictably low end-of-year return to growers after a season turned to disaster by a worldwide oversupply of fruit.

Executive chairman John McCliskie said yesterday that the only amazing thing for some growers about the net average return of $10.96 a carton was that the figure was not lower.

Some described the payment, which just scraped in above the calamitous 1997 return of $10.21, as a pleasant surprise, he said.

"They weren't expecting a lot more money but they thought the payment might have been lower given the publicity."

Pipfruit Growers deputy chairman Phil Alison said the return was a big disappointment. It was just one of many pressures likely to force some growers out of business.

Increasing supermarket power and the need to operate sophisticated technology just to stay on top were spelling the end of the "little grower," he said.

"The only way now is to reduce costs, and to do that you need scale."

Enza sold 17.6 million cartons in the 1999 season, 3.7 million more than in 1998 when its net average return was $14.17 a carton.

Total revenue for the year was $630.3 million, of which growers have been paid $193.5 million. That compared to revenue of $597.6 million in 1998 when growers got $202.4 million.

Mr McCliskie said Enza would announce next year's estimated returns in two weeks, and in February would predict the fixed amount on which advances to growers for the 2000 season would be made.

He was confident they would be higher than this year as a result of a new industry structure cutting costs further. The industry had a promising future, he said.

"New Zealand still has a key focus on differentiated product. We are adding 12-month supply and we are going to invest in product differentiation through the HortResearch [variety development] joint venture," he said.

Mr McCliskie, who has taken the role of chief executive since the resignation of Gary Smith in August, said interviews were under way for a replacement who was likely because of restructuring to have a salary lower than Mr Smith's $600,000 a year.