Zespri claims rights to future kiwifruit cultivars

By KENT ATKINSON

National kiwifruit marketer Zespri has reached out for the intellectual property rights to all new kiwifruit cultivars developed by scientists in the Government science company Hortresearch.

Zespri announced today that it will take control not only of the plant variety rights to the lucrative gold kiwifruit developed by Hortresearch, but every cultivar that the scientists there ever develop in the future.

The gold kiwifruit -- which has been earning growers up to twice the value of conventional green kiwifruit since its commercial release in 1998 -- was developed by breeder Russell Lowe, at the Te Puke Hortresearch Centre. The centre runs the world's best collection of actinidia (kiwifruit) species outside of China and the best collection at any one site, and holds more than 20 of the 60 known species, with 25,000 seedlings in the ground at any one time.

Mr Lowe selected the Hort 16A cultivar of actinidia chinensis, now marketed as "Zespri gold", which currently earns about $170 million a year.

The conventional green varieties, such as hayward, were bred from the actinidia deliciosa species first planted in New Zealand in 1904.

Initially known as chinese gooseberries, the hayward cultivar was not "patented" when it was developed as an export crop 45 years ago.

The kiwifruit sector went through a boom in the 1970s but came unstuck in the mid-80s, after orchardists began shipping kiwifruit budwood and seedling plants to orchardists in Italy, Chile, Australia and California -- all now competitors for New Zealand.

By 1990, kiwifruit in key northern hemisphere markets was as likely to come from Italy as Te Puke, and by 1992, the global glut was so great that markets collapsed.

In future years, the kiwifruit industry's profitability is expected to partly pivot around the extent to which Hortresearch can provide a steady stream of new cultivars. Zespri will then control not only the plant variety rights, but the global marketing rights.

By controlling the scarcity of each new fruit, Zespri will milk premiums from affluent markets prepared to pay for novelty.

The gold kiwifruit are planned to eventually make up a sixth of the national crop, which is now earning nearly $1 billion in sales.

The contracts, for a sweet golden-fleshed fruit bred from actinidia chinensis rather than the actinidia deliciosa, the parent of established green cultivars, are part of a move by the marketer, Zespri International, to achieve year-round global sales.

Zespri expects that by controlling the scarcity of its golden kiwifruit through tight controls on marketing of the fruit grown in Italy, it will be able to maintain a long-term price premium for the fruit.

Under the terms of the agreement announced today, Zespri will hold the plant variety rights and other intellectual property of cultivars developed by Hortresearch, and the crown science company will be Zespri's principal provider of research.

"Zespri has committed to increasing its investment in our kiwifruit breeding and research programmes and we have agreed to re-invest at least half our kiwifruit royalties in further kiwifruit research," Hortresearch chief executive Paul McGilvary said.

"We have ... secured the certainty of income essential for our long-term science planning.'

Zespri chief executive Tim Goodacre said Hortresearch had been made Zespri's "exclusive breeder" partly because it had the world's best germplasm resources and has a proven track record in successful kiwifruit research.

Previously, Mr Goodacre has said Zespri was made aware of the risks of intellectual property being held outside his company when Hortresearch began negotiating to hand Australian growers access to decades of cutting-edge apple breeding. Hortresearch was unable to find sufficient funding for that area of its science in the deregulated apple industry.

Zespri is forecasting sales for the year to March 31 of $930 million, 11 per cent higher than last year.

- NZPA