There could be as much as 4000 hectares of Zespri's SunGold brand kiwifruit illegally planted in China, the global marketer's annual meeting has heard.
Chief executive Dan Mathieson, addressing grower-shareholders from his Singapore-base because of Covid-19, told the company's first online annual meeting the situation was highly complex. More than 350 people attended online.
The gold fruit brand is Zespri's biggest seller, setting the pace for the last financial year's record kiwifruit sales and helping to lift global revenue by 7 per cent to $3.14 billion.
"Our focus remains halting the growth of these plantings and mitigating the impact on our brand and business, and we'll continue to adopt a multi-faceted legal and political approach to protect our retail channels.
"One potential option we've been advise to explore is whether there is a commercial opportunity in commercialising SunGold in China that generates returns for our industry and also mitigates the spread of unauthorised SunGold," Mathieson said.
No decisions would be made before consultation with New Zealand stakeholders and shareholders.
Mathieson said Zespri would continue to speak with its grower-owners and the New Zealand and Chinese governments in the coming months.
Chairman Bruce Cameron said in the 2019-2020 financial year, the average return for SunGold was up 11 per cent to $161,660. Green fruit return per hectare was up six per cent to $67,295.
Returns direct to the New Zealand industry increased by eight per cent on the previous year to $1.96 billion. Zespri also has overseas growers.
Mathieson said the company had reconfirmed its intention to continue the annual SunGold licence release process until 2022, subject to annual reviews.
It had signalled the release of 350-750ha per year from 2023 to 2026, subject to annual review, including assessing potential new risks to the demand outlook.
Demand for SunGold remained strong, he said.
The industry this year farewelled one of the driving forces behind SunGold's development, Plant and Food Research scientist Russell Lowe, who retired.
SunGold was in the industry's breeding programme in 2010, when bacterial infection Psa caused major losses in nearly half New Zealand's kiwifruit orchards and the gold fruit grown at the time showed no resistance to the biosecurity incursion.
Zespri commercialised a red fruit and released the first round of growing licences in the 2019-2020 financial year. It also launched a new-look brand.
Cameron said the new financial year with a milestone achievement in Shanghai, where the government had approved Zespri's application for key trademark protection status - the only fruit brand and the only New Zealand brand to be recognised like this.
"It is a strong acknowledgement of Zespri's profile, market share and positive corporate reputation.
"It also reflects the challenges that we face with counterfeiting, including with unauthorised growing of Zespri's gold fruit in China."
The past year had been incredibly challenging for the industry and the company, Cameron said.
"But it's also a year in which we've made decisions that will set us up for future success."
Zespri sold 164.4 million trays of kiwifruit to the world last year. It reported strong market growth globally with sales up 10 per cent or $84m in greater China, up 8 per cent or $52m in Japan, and in Spain sales rose by 5 per cent or just over $14m.
Work had continued on the formation of territory in Europe and North America.
The industry's 27,000 workers in New Zealand had found new ways of working in the pandemic to get the job done, Cameron said.