The newly elected president of a right-wing political party has allegedly called for the creation of a second export desk for shipping New Zealand-grown kiwifruit to China, which he himself would chair.
The duopoly would see the creation of Southern Fresh Kiwifruit Exports (SFKE), with Auckland-based fruit exporter John Thompson to act as the firm’s managing director, according to Fairfax Media reports.
SFKE would essentially be a joint venture between Thompson’s company Southern Fresh Fruit Exports Limited and Neuhof Trade, the same Shanghai-based importer embroiled in a recent Chinese smuggling scandal involving New Zealand’s single-desk exporter Zespri.The case saw former Neuhof chairman Liu Xiongjie sentenced to 13 years in prison and forced to repay RMB37m (US$5.95m) in underpaid customs duties, while Zespri’s Chinese-based subsidiary was fined RMB5m (US$950,000) for its involvement.
It is understood Liu’s nephew, Auckland-based Jhun Si, would serve as an SFKE director, while former Zespri board member Mark Bayley would be appointed commercial manager.Fairfax claim SFKE have proposed to export 16m trays of kiwifruit to China annually, at a value of US$200m, with the company’s commission to be around US$30m.
Earlier this month, Thompson was appointed president of the ACT New Zealand, a political party who have openly called for an independent review of the kiwifruit sector and the single-desk model. When elected, Thompson wrote to New Zealand’s Primary Industries Minister Nathan Guy to disclose his conflict of interest and pledge to keep his business and political interests seperate, according to Fairfax.
Fruitnet understands Thompson has held several meetings with members of federal cabinet in Wellington, including Prime Minister John Key, to discuss the duopoly model.At these meetings, Thompson is believed to have raised several concerns about governance shortcomings at Zespri, citing the marketer’s involvement in the Chinese smuggling scandal and the fact it is currently under investigation by New Zealand’s Serious Fraud Office.
Fruitnet also understands Southern Fresh Fruit Exports has a complaint registered with the New Zealand Commerce Commission regarding anti-competitive behavior from Kiwifruit New Zealand and Zespri, who they allege colluded in order to prevent the exporter from gaining a collaborative marketing license in China two years ago.
Members of New Zealand’s Ministry for Primary Industries have confirmed they have met with Thompson, however, Guy doubts there is a groundswell of support for the proposal at industry level.“The industry belongs to kiwifruit growers and the majority of growers support the single seller model,” Guy told Fairfax.
