Market ruffled by apple export row

The mere potential for rival exports of New Zealand apples has been enough to destabilise some markets for fruit exported by Enza, say two of its senior marketers.

Enza - previously a monopoly exporter through the Apple and Pear Marketing Board - is campaigning against the system set up by the National Government, which allows consent to be given for parallel exports into the same markets that Enza targets.

Its marketing executives were speaking to journalists while visiting New Zealand to brief growers.

"We have a certain amount of instability in the market," said Paul Cassinos, commercial director of the British-based Enzafruit Worldwide, a joint venture between Enza and European wholesaler Geest PLC.

"Buyer confidence in the UK has been somewhat undermined."

In the UK market, a key problem was that to a certain extent retailers were prepared to pay a premium for New Zealand apples, but only if they could be assured that their competitors would not be able to buy similar NZ fruit at a lower price, he said.

"It's not the volume per se - it's the moving from a single-channel agency which gave confidence to the retailers," said Mr Cassinos.

Service providers were jostling for position in a shrinking market. Enzafruit worked as a global importer and 12-month supplier to those retailers, whose buying power was increasing as the number of chains was consolidated to just a few.

The market was extraordinarily competitive, and the apple trade was heavily oversupplied at a time of declining pipfruit consumption. New Zealand exports 350,000 tonnes of apples whereas the United States produces 5 million tonnes, the European Community 8 million tonnes, and China 25 million tonnes.

Mr Cassinos said the UK market was dominated by half a dozen retail chains that controlled 70 per cent of the British produce business.

James Milne, of Vancouver, president of Enza's North American Enzafruit subsidiary, said a similar process was taking place in North America. Within four years, 10 retail chains and distributors would control up to 80 per cent of fruit and vegetables.

"They are looking for category suppliers to provide them with a 12-month supply programme of unbroken supply of consistent quality and regular pricing," he said.

Mr Milne said the row over the export consent process in New Zealand had been extraordinarily destabilising.

It was important that retail chains knew their rivals were not going to be able to undercut them on NZ fruit.

"The moment there is another option available, they're all in a state of lacking confidence."

Meanwhile, Parliament's primary products select committee chairman, West Coast-Tasman MP Damien O'Connor, said a meeting scheduled for this week between Enza, the consents committee and the select committee was aimed at reassuring the committee that the new permits process was not undermining Enza's market share.

- NZPA