By Chris Hutching
Friday 8th September 2000
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Nelson grower Danny Freilich has encouraged other apple growers to throw off the cloak of protection Enza offers and this week invited many of them to come to his orchard and discuss independent marketing with the US buyers he has been dealing with in recent years.
"Corporatisation was meant to be a tool towards deregulation. Agriculture Minister Jim Sutton says there will be a review in a year. I say it's an affront that I should have to make applications to the Apple and Pear Marketing Board's export consent panel to market my own fruit," Mr Freilich said.
But GPG executive director and new Enza chairman Tony Gibbs emphasised the opportunities for growers through the independent export consent panel and reiterated the significance of the monopoly for obtaining funding and advance payments to growers.
Mr Freilich acknowledged some growers might face transitional difficulties but he said last year he had arranged for advance payments to growers who had used his export services.
According to Mr Gibbs, the decision by Agriculture Minister Jim Sutton to review the monopoly in a year is a "very sensible and sane move."
"At this time of year when the apples are no more than flowers on the trees, apple growers are receiving advance payments in the order of $300 million or so. If Enza doesn't get the crop [under the monopoly] it wouldn't get the funding," Mr Gibbs said.
"At the moment we're undertaking our own review of operations with a view to implementing efficiencies and getting better returns for growers.
Mr Gibbs said one of the main issues to be addressed was hedging policy. Enza was also the biggest cool-store operator in the country and operations in this would be looked at too.
Market analysts expect GPG will enact efficiencies before looking for a buyer for its value-added stake.
Meanwhile, a Grant Samuel report confirms warnings from former Enza chairman John McCliskie that growers were selling their shares too cheaply.
The report found individual orchardists' shares in the company are worth $2.43 to $2.91 each, compared with the $1.65 paid by GPG and FR Partners last month.
The two companies each spent about $6 million for their individual 18% stakes. According to Mr Samuel, the apple marketer is worth $97.4 to $116.4 million, equating to a share price of $4.87 to $5.82.
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