G6 Kiwi Welcomes Kiwifruit Industry Changes For 06

News Release
For Immediate Release
December 13, 2005

G6 Kiwi Welcomes Kiwifruit Industry Changes For 2006

The kiwifruit industry faces a number of operational and contractual changes in 2006, including increased incentives for producing tastier fruit.

The changes are the outcomes of projects and reviews during 2005 that had a strong focus on efficiency, quality, performance and accountability.

Kiwifruit supplier G6 Kiwi says its facilities are well placed to accommodate the 2006 Supply Agreement changes, including the new taste incentives, changes in loyalty contracts and the introduction of tougher delivery performance requirements.

At G6 Kiwi's final 2005 directors meeting, general manager Linda Mills reported that group members had continued to improve their performance over the past year and are ready to embrace changes in the industry next year.

Mills says many of the changes being introduced for 2006 will stimulate new approaches to better optimise kiwifruit supply management.

G6 Kiwi made a submission earlier this year to the industry-driven Compensation and Equalisation Project in agreement with its option of 'sharpening the commercial drivers in the supply contract for performance for 'delivery in full, on time and in specification' (DIFOTIS) with penalties being imposed for non-delivery'.

"Suppliers also need to step up to the performance mark – looking internally as well as externally for performance improvement. We see the adoption of these DIFOTIS performance-related penalties and premiums as an opportunity for suppliers to earn bonuses by supplying fruit against others shortages or late delivery," Mills says.

Growers also face changes to Zespri's loyalty programme, although the change will bring larger rebates. Currently growers receive a rebate from Zespri if they are loyal to the company. Next year that loyalty programme will be enhanced to include growers packing with post harvest and suppliers that are also exclusively aligned with Zespri.

A number of other measures will also be put in place next year to sharpen the kiwifruit supply chain, including crop estimation and wharf audits.

G6 Kiwi chairman Alister Hawkey told facility representatives at an end of year function that they must continue to earn a living through quality and performance, not expect it as a right.

"By sharing knowledge within G6 Kiwi, together with overarching contract management function provided by G6 Kiwi, our members are in a strong position to maximize grower returns."

G6 Kiwi is the second largest supplier of kiwifruit to Zespri and supplied 17% of the national crop in 2005.

ENDS

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