Zespri: We didn't act in bad faith

Photo / Alan Gibson

Zespri Group yesterday told a court there was "no discrimination among suppliers", and statutory controls on kiwifruit exports outside Australasia allowed other growers to export.

Turners & Growers, a subsidiary of Sir Ron Brierley's investment company GPG, last year filed proceedings against Zespri and its subsidiary Zespri International in a bid to trigger deregulation of kiwifruit exports.

A four-day hearing started on Tuesday in the High Court at Auckland to consider the validity of kiwifruit export regulations giving Zespri a monopoly and whether the court had jurisdiction to determine if Zespri had discriminated against potential exporters or failed to allow diversification.

David Goddard, QC, counsel for Zespri Group, said the terms of exclusivity contracts with growers and the payment of loyalty premiums were generally admitted by Zespri, subject to certain qualifications.

"Zespri says the contracts and associated payments had been offered to all growers ... so there was no discrimination among suppliers."

Goddard said Justice Douglas White would have to determine whether there had been discrimination among suppliers in these circumstances, and whether it was justifiable.

Turners & Growers says Zespri has failed to comply with the industry's non-diversification rule by giving Kiwifruit Growers funding and by engaging in certain "lobbying" activities, as well as growing/buying and selling kiwifruit grown in countries other than New Zealand.

But Zespri says these activities were necessary for its core business.

Zespri is also said to have acquired the rights to kiwifruit cultivars and developed new cultivars, as well as establishing and operating a business dealing in kiwifruit products.

But Zespri says approvals were obtained from providers of capital.

Goddard said shareholders and suppliers who had not agreed were not exposed to a more than minimal risk.

Zespri had not acted in bad faith and an export regime could be considered, Goddard added.

Kiwifruit export regulations provide for export under collaborative marketing procedures, as long as prospective exporters can show their proposal is in the best interests of the nation's kiwifruit growers.

But Turners & Growers wants to export its own gold, red and sweet green kiwifruit, without having them first assessed in comparison with the returns available from rival cultivars, such as Zespri's.

The independent industry regulator, Kiwifruit New Zealand, has previously turned down three Turners & Growers applications to export 325,000 trays of kiwifruit to Japan, Mexico and the United States.

The remaining issues in Turners & Growers' case are scheduled to be heard next May.

- NZPA