T&G piles on Zespri pressure

Turners & Growers has stepped up its hunt to get answers from New Zealand kiwifruit exporter Zespri and helped unveil a report into the company’s tactics.

T&G, which has added Enza pink kiwifruit to its green, gold and red cultivars, has released a presentation asking why growers cannot see reports such as the one conducted by specialist consultancy firm Grant Samuel.

In January 2007, Grant Samuel submitted a draft Margin Benchmarking Analysis Report to representative body NZKGI for use in a three-yearly review of the margin Zespri charges to growers.

But the draft report alleged a lack of transparency in Zespri’s practices, some disappointment in Zespri’s collaborative marketing by exporters and claimed Zespri’s share of returns had increased, while the growers’ share had declined.

T&G also believes there are problems with how Zespri set its margin and the way Zespri allocates costs between growers and shareholders.

In a statement, T&G said: “As a monopoly, Zespri should be transparent about its costs and margins.

“NZKGI commissioned the report, on behalf of growers, which was very critical of Zespri’s practices. Instead of disclosing this report to growers, Zespri and NZKGI have done their best to cover it up. Growers should ask why they cannot see reports like the Grant Samuel report, even though they paid for it. Growers should also demand that Zespri answer Grant Samuel’s criticisms and explain what steps have been taken to address them.”

In the original draft report, Grant Samuel states: “Kiwifruit growers must use Zespri to export their fruit to overseas markets. They do not have the option of using another exporter. In Grant Samuel’s opinion the monopoly rights of Zespri bring with them increased obligations for disclosure and transparency, particularly with regard to expenditure charged to grower pools and Zespri’s commission structure.”

Zespri chairman John Loughlin said earlier this year: "Zespri is widely recognised as New Zeland’s most successful fruit exporter and the world’s most successful horticultural marketer and that is for very good reason; we continue to deliver value to New Zealand growers, the industry as a whole and the NZ economy.”