Friday 18 June 2010

Zespri [updated]

If any of you Kiwis can explain to me slowly why it should be that Zespri gets to maintain a government-mandated monopoly on kiwifruit export to places other than Australia, when we've sensibly gotten rid of all of our other export boards, I'd be keen to hear it.

Carefully note why kiwifruit is somehow different from other agricultural products that lost export monopoly twenty years ago or more.

From the National Business Review:
A privately owned rival, Turners and Growers, recently launched a legal challenge to Zespri because it wants to be able to export its own red and gold cultivars, and an early green fruit it has licensed, without putting them though the development trials and assessments like the Zespri fruit.

Zespri argues that New Zealand should only export the best and most commercially successful cultivars, but T&G is trying to break the Zespri monopoly on sales outside Australasia because it says that if it controls the plant variety right for a cultivar, it should be allowed to export that fruit in competition with the rest of the NZ-grown crop.

Zespri chief executive Lain Jager said the decisions were vitally important steps in the continuing development of the New Zealand kiwifruit industry, and part of its medium- and long-term strategy to progressively and sustainably grow sendings from this country "while taking care not to cannibalise existing sales and prices."
It's previously been suggested that Zespri provides overall quality control for the New Zealand brand, ensuring a price premium for high quality product. But surely that same premium could be achieved by building the Zespri brand rather than just the New Zealand brand. Otherwise, we could have Fisher & Paykell argue for an export monopoly on dishwashers on basis that allowing lower quality dishwasher exports would erode the New Zealand brand of high quality machines. Or Montana could have argued for a monopoly on wine exports on similar basis 20 years ago. So if you're going to hang an explanation on branding, it has to be one that doesn't apply to every other industry.

Ok, go.

Update: NBR reports National's happy to keep the export monopoly so long as growers want it. In Canada, growers who didn't want the marketing board were subject to intimidation by the marketing board. I certainly hope that's not the case here.


  1. I agree with you Eric, if only to wipe the smug smile off the face of the Zespri spokesman interviewed on TV last night. There are other reasons that of course, but that one is pretty high on my list ;)

  2. I’m as mystified as you are. I remember when the pipfruit industry was deregulated (with the aid of Tony Gibbs, and accompanied by much wailing and moaning from the industry). The quality of apples for sale didn’t improve as much as I’d hoped, but at least the price dropped considerably. You no longer had to pay excessive amounts for a disgusting woolly-fleshed Red Delicious that would have been at least a year old by the time it appeared in the shop. I’d pretty much stopped buying apples by then.

    The argument that there should be no change unless growers want change annoys me. If all growers really want to stay with Zespri, then removing the lack of choice should result in no change, so what’s the problem then?