The long-running dispute between New Zealand exporter Turners & Growers (T&G) and single-desk marketer Zespri Group has reached its latest peak in Auckland, where a four-day High Court hearing has been convened to consider whether or not the country's kiwifruit export regulations are lawful and if the court itself has the right to decide whether or not Zespri has breached those rules.
Issues not covered at this week's hearing will be addressed at a six-day substantive hearing scheduled to start next May, where T&G will lobby for the right to export its proprietary kiwifruit cultivars to countries outside of Australasia without having to apply for collaborative marketing agreements via the current single-desk system.
Campbell Walker, counsel for T&G, delivered the company's 70-page submission document on the opening day of this week's hearing, alleging that Zespri's control of the New Zealand kiwifruit export industry was preventing grower from sending their fruit overseas independently.
The country's independent industry regulator, Kiwifruit New Zealand, has previously turned down three of T&G's applications to export 325,000 trays of kiwifruit to Japan, Mexico and the US.
As reported in national daily newspaper the NZ Herald, T&G's submission argues that the current export regulations – established by the 1999 Kiwifruit Industry Restructuring Act – prevent growers from associating with any other exporter and force kiwifruit growers to be shareholders of Zespri.
According to the Otago Daily Times, Mr Walker added that Justice Douglas White, the judge presiding over the case, would have to determine whether Zespri had discriminated against certain suppliers and whether that was justifiable in the context of loyalty premiums and exclusivity contracts he suggested were given to growers.
However, lawyers acting for Zespri told the court on day two of the hearing that it had 'not acted in bad faith' in dealings with kiwifruit growers and distributors, pointing out that statutory controls on exports of kiwifruit outside Australasia allowed for other growers to export.
As reported on the Stuff.co.nz Business Day website, counsel for Zespri, David Goddard QC, said the company had not acted in bad faith and an export regime could be considered.
'A permit regime could apply to certain kinds of fruit, with consideration given to the terms and conditions of such permits,' he said. 'This could restrict exports to North America and Europe, or a number of African countries to which Zespri does not export.'
Representatives from T&G and Zespri have declined to comment publicly on the hearing until it concludes on Friday. Fruitnet.com will bring you reaction from both sides then.
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