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Kiwifruit NZ follows court edict to reconsider two collaborative marketing proposals, says no again

Friday 13th May 2016

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Kiwifruit New Zealand, the kiwifruit industry regulator, says it has followed a High Court ruling to reconsider collaborative marketing proposals from Splice Fruit and Seeka Kiwifruit that it had previously rejected, but the answer is still no.

Te Puke kiwifruit exporters and marketers Splice and Seeka Kiwifruit had gone to the court for a judicial review of three Kiwifruit NZ board decisions last December rejecting collaborative marketing proposals in the 2016 export season. A fast-tracked court hearing was held because the 2016 season is already underway.

Justice Paul Heath had ruled that the two applicants were entitled to expect some sort of review process for such proposals and directed a rehearing by the board or a nominated committee for all three decisions.

Splice had wanted to export 400,000 trays of green Class I fruit to Austria while Seeka wanted to export 400,000 trays of green fruit to Hainan Island in China and 120,000 trays of green fruit to Xinjiang province in China. Kiwifruit NZ rejected Splice’s proposal on the basis that it wasn’t entirely consistent with the marketing strategy of creating brand value and premium returns to New Zealand suppliers and didn’t meet the test of creating overall wealth for New Zealand kiwifruit suppliers. In rejecting Seeka's two proposals, it said it was concerned that fruit destined for Hainan Island could “leak” into mainland China and create “confusion and disruption” in a very large market which could depress prices while in the Xinjiang province the board said it was worried selling under the Seeka brand would lead to a “substitution risk for Zespri branded programmes”.

Kiwifruit NZ said it held that reconsideration hearing on May 9 and considered the applications and the new material from both the applicants and Zespri.

"KNZ has carefully gone through all that material and has decided that the applications did not achieve the purpose of increasing the overall wealth of New Zealand kiwifruit suppliers, and therefore all three applications were declined," it said in a statement from chief executive Geoff Morgan.

Kiwifruit NZ's 2014/15 annual report shows collaborative marketing volumes dropped during the season to 1.6 million trays out of 97 million trays exported. The report said on average 93 percent of collaborative marketing applications in the past decade had been approved although “disappointedly, none have evolved into high volume, significantly innovative and wealth-enhancing arrangements that meet the regulatory criteria”.

In February this year, Zespri signed a memorandum of understanding with T&G to grow exports, three years after the listed produce company abandoned its long-running legal fight against the kiwifruit marketer’s statutory export dominance. It was the first deal of its kind to be approved by Kiwifruit NZ.

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