Zespri fined ½ million dollars for anti-competitive behaviour

Friday 18th November 2011 3 Comments

Zespri International, the world’s largest marketer of kiwifruit, has been fined half a million dollars for anti competitive behavior in the Korean market.

The Korean fair trade commission (KFTC) fined the company yesterday for hindering the domestic sale of kiwifruit. The commission found Zespri signed a sales contract with E-Mart, the nation’s number one supermarket chain, not to sell cheaper Chilean kiwis. A similar deal was made with Lotte Mart, Korea’s number three supermarket player.

“The distribution of cheaper Chilean kiwis at major retail chains would prompt price competition within the industry,” said a KFTC official. Instead, the Zespri contracts resulted in New Zealand kiwifruit prices rising 13 percent in the Korean market.

In a statement released today Zespri confirmed it had adjusted “certain business practices in Korea” and it was found to have “wrongly sought favourable positioning in the Korean market.”

The company’s communications advisor David Courtney said, the KFTC will release its full decision in two weeks and no comment would be made before then.

Zespri has statutory monopoly on the export of kiwifruit produced in New Zealand.

BusinessDesk.co.nz

Comments from our readers

On 19 November 2011 at 6:43 pm Winston Marsh said:

Zespri does not need a PhD in anti-competitive practices advising to work out that what it was doing was unlawful in most developed countries. Why does it attempt to undertake such blatantly unlawful practices ? It gives other NZ traders in the Korean market a bad name also. It should know better.The removal of its monopolistic powers seems justified.

On 19 November 2011 at 6:52 pm Roger said:

Although this item does not specifically mention free trade, I believe it should not be confused as a put (sell) option, or a call (buy) option, but merely as permitting potential buyers and sellers to have an unencumbered right to trade if both so agree. Under this definition of free trade, Zespri would have the right to withhold part of its products if it so desired. However, I recognise an agreement with a third party might be market manipulation, but only if that third party was a competing supplier.

On 21 November 2011 at 11:03 am Mark said:

Happens all the time in the technology sector. Want to sell "Apples" exclusively? Then you won't be able to sell other cheaper brands.