Zespri says rogue growing of smuggled NZ gold kiwifruit in China continues

Gold kiwifruit is a global best seller for New Zealand's Zespri. Photo / File

Rogue growing of New Zealand-developed Zespri gold kiwifruit in China is heading towards 8000 hectares, with fruit production also increasing as earlier unauthorised plantings reach maturity.

Around this time two years ago Zespri estimated unauthorised plantings of the bestselling variety covered at least 5500ha, having spread by 1500ha the previous year.

In August last year the Bay of Plenty-headquartered global kiwifruit marketer estimated 7000ha.

In its latest newsletter to New Zealand growers, Zespri said its most recent assessment indicated there were now around 7850 total hectares of unauthorised Gold3 plantings in China.

The Gold3 variety is marketed as Zespri SunGold, and is Zespri’s best global seller.

The variety, for which Zespri owns the intellectual property, was smuggled out of New Zealand.

“New plantings in the Sichuan Province appear to have slowed with less successful growers switching to other varieties or land uses, although overall production is increasing as more of the plantings reach maturity,” the newsletter said.

“Our previous estimate last August indicated there were around 7000 total hectares of unauthorised Gold3 plantings in total.”

A bridge in Sichuan Province, China, where rogue plantings are estimated to be about 8,000 hectares. Photo / Philippe Lejeanvre, Getty Images

New Zealand growers are required to buy licences to grow the gold fruit. Last financial year Zespri received $430.1 million from growing licence sales.

China is the biggest producer of kiwifruit in the world with a rapidly modernising industry.

It is an important market for Zespri, with 20 per cent of New Zealand kiwifruit sold there. China is Zespri’s biggest export market alongside Japan. Zespri is among the top fruit consumer brands in China.

Fruit from the New Zealand-developed breed grown in unauthorised orchards was being sold in China last year, prompting Zespri to ask its growers mid-year to support a plan to counter the spread of the problem.

But the proposal for a tightly-controlled commercial growing and sales trial with Chinese growers failed to get the 75 per cent vote of support it needed, with growers backing it by 70.5 per cent.

A secondary proposal to use the Zespri brand label as part of the sales trial in order to understand consumer response also failed to meet the 75 per cent support threshold, getting 64.1 per cent backing.

In the newsletter, Zespri said it was monitoring the situation in China closely as it considered its next steps, including potential local legal action.

Chief executive Dan Mathieson, in Japan for the 2023 export season kickoff, told the Herald that Zespri planned to take New Zealand kiwifruit industry leaders to China later this year to see the situation and discuss options.

In July last year after growers failed to support Zespri’s trial plan, Mathieson said it wasn’t a signal orchardists wanted to retreat from China.

“They want us to be in China, they want to continue to grow value in that market,” he said at the time.

The 70 per cent vote was “actually really good support” but 30 per cent of growers still had concerns, Mathieson said.

“The main concerns they have is that they’ve invested a lot in SunGold and in the last 20 years have been working hard to develop value in the China market and they want to continue to grow and protect that value.

“And I think a major concern was protecting the Zespri brand if we were looked at growing options in China.”

Zespri is entitled by New Zealand regulations to export all this country’s kiwifruit, except to Australia.

The company, which has around 2800 growers in New Zealand, recorded global kiwifruit sales of more than $4 billion in 2022. It also contracts some growers overseas to supply Zespri-branded fruit.