Fresh start for big two fruit exports

By PHILIPPA STEVENSON

The country's two major horticultural exports - kiwifruit and apples - begin a new era today.

Friday marked the end of the producer-board age in which the Kiwifruit Marketing Board and the Apple and Pear Marketing Board were the industry regulators as well as the sole exporters of their suppliers' fruit.

Today is the first working day for the new-look Zespri International and Enza, whose suppliers are also shareholders and can trade shares, but only among themselves.

It follows the coming into force on Saturday of legislation passed last year, essentially reregulating the industries and providing for new bodies independent of the marketers to approve export permits.

In kiwifruit's case, the regulatory board will be Kiwifruit New Zealand, which will decide whether companies can collaboratively market with Zespri.

The industry has already publicly floated Kiwifruit International, in which many growers have taken shares, to be the arm which trades in fruit from other countries to guarantee year-round supply to customers.

Ahead of the new regime, the apple industry has experienced the fallout from the already-operational independent export permits committee appointed by the new regulatory Apple and Pear Board. The committee's role is to approve permits that complement Enza's marketing and which are unlikely "to result in any adverse effect on Enza's reputation in the relevant overseas market."

So far, and with much controversy, the committee has granted export permits for 1.76 million cartons from applications for 8.33 million. Last year, Enza exported 17.6 million cartons.

In recent months, Enza has said the permitted exports could damage its marketing plans, while frustrated independent exporters say they have been denied permits which would have shifted more of the crop.

The two fruit sectors, which together make up more than half of New Zealand's horticultural exports and earn close to $500 million each in export returns, marked the new era in vastly different ways.

On the back of several successful seasons, the kiwifruit industry, the dominant player in the global kiwifruit market, ushered in the new structure with a gala dinner for 300 in Tauranga attended by Prime Minister Helen Clark and past and present industry personalities.

Zespri chairman Doug Voss said the industry was well-prepared for the change, which would be relatively seamless and cause no disruption to business.

"We have not only properly defined ownership and now have producer shareholders with tradable securities, but we have also set in place new direct contract arrangements for supply of fruit and taken the first steps to be a year-round global marketer of kiwifruit rather than being bound by New Zealand's seasonal supply."

Zespri also had the exclusive rights to the new yellow-fleshed Zespri Gold kiwifruit which was "already setting alight the fruit world," Mr Voss said.

Zespri is planning a major promotional effort to launch the gold fruit worldwide from May after two years of test-marketing in selected countries.

Around 100,000 trays were exported in 1998, but the fast-growing and prolific gold vines will provide an expected five million trays this year. The green fruit crop is likely to be around 53 million trays.

Meanwhile, Enza chairman John McCliskie marked the new era for apple exports by announcing his resignation, effective from September 30, amid a new row over the quantities of the mainstay braeburn crop to be accepted for export.

Enza fruit claims a premium in a highly competitive market, but applegrowers are struggling with low returns. There have been several calls for Mr McCliskie, chairman since 1987, to resign. The most recent was over a decision to reward growers exporting with Enza this season with the $25 million from the two-year-old sale of the Frucor fruit juice company. The move is under appeal.

A new chief executive for Enza, David Geor, also begins the job today after former chief Gary Smith quit abruptly in September following disastrous returns for braeburns.

Mr McCliskie assumed the chief executive's role in the meantime and said the timing of his departure, first signalled in December, was to allow the retention of "institutional knowledge at this crucial time in our organisation's history."

The Independent Pipfruit Growers Association, which is critical of Enza, said his departure was "not before time."

"He leaves the industry at a time of great uncertainty and [after] a litany of failures including massive forex losses, the Omniport catastrophe, wasteful America's Cup spending and the disastrous Chilean investment."