New Zealand topfruit marketer Enza has come under fire from growers unhappy at the level of returns they are receiving for the trademarked apple variety Jazz.
Enza, which holds the exclusive marketing rights for the apple, recently revised its market forecast return for New Zealand-grown Jazz to NZ$20.40 (€10.97) a carton.
That figure has apparently caused concern since per-hectare production costs for the variety are significantly higher, and above the level spent to grow other varieties such as Braeburn and Royal Gala.
'Returns are currently around NZ$5 (€2.69) away from break-even for orchardists, and this is the second year in a row we've received less than the cost of production,' said Paul Thomas of Thomas Brothers Orchard, Packhouse and Coolstore Complex near Nelson.
In an interview with the Bay of Plenty Times, Mr Thomas said growers 'expected better' from Jazz, which has a PVR (Plant Variety Right) and a single seller.
'Growers down here are pretty despondent and some have already grafted over their Jazz trees to other varieties including Fuji and Pink Lady. We can't go on losing money year after year,' he said.
However, he did accept that the strength of the New Zealand dollar had also taken a large bite out of apple returns across the board.
Enza general manager Snow Hardy responded to the concerns, insisting it was not unusual for a new variety to have 'a few hiccups' while establishing itself on the international market.
'Over the longer term we are confident that Enza's international promotion to position New Zealand apples as the premium fruit variety in the world will grow and add value to the New Zealand industry,' he told the Bay of Plenty Times. 'Controlled apple varieties such as Jazz and Envy are essential to this work.'
Enza is understood to contribute NZ$1.84 per carton and the growers NZ$1.28 per carton, with additional investment from Enza in generic promotion of New Zealand apples.
Mr Hardy also argued that growers in New Zealand who had pulled up their Jazz apple trees during the past 12 months had done so not simply because of poor returns.
'Receiverships of some apple operations reported recently have not and cannot be linked to Jazz,' he told the newspaper. 'In every industry one or two businesses struggle for a variety of reasons and this is no different with apples. Remember that the typical apple orchard would run at least five varieties of apples.'
Speaking to Eurofruit Magazine, Jeff Wesley, managing director of Enza's parent company Turners & Growers, said the biggest impact on New Zealand grower returns this year had come from exchange rates.
'The New Zealand dollar is higher in value against its sterling average by 31 per cent, up 10 per cent against the euro and up 25 per cent against the US dollar,' he observed. 'Or, if you like, the pound is worth 31 per cent less, the euro 10 per cent less and the US dollar 25 per cent less.'
'So, for example, take £23 (€25.82) for the wholesale price of a box of New Zealand apples sold in the UK,' he continued. 'At the 20-year average exchange rate, that converts to NZ$64 (€34.40) to pay all the costs and provide the grower return. At the current exchange rate, £23 converts to NZ$50 (€26.88). Fourteen dollars has disappeared from the equation due to the dismal value of the pound and nothing else.'
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