Zespri dismisses industry deregulation

MEDIA STATEMENT 30 November 2009

ZESPRI dismisses Taskforce suggestion to deregulate kiwifruit industry

ZESPRI considers the 2025 Productivity Taskforce recommendation to remove the kiwifruit regulations as completely unacceptable. ZESPRI Chairman John Loughlin said the recommendation would lead to a significant productivity drop and a reduction in New Zealand’s export earnings.

“In the last 10 years, the New Zealand kiwifruit industry has doubled in size and value, significantly contributing to the New Zealand economy and delivering wealth to New Zealand kiwifruit growers,” said Mr Loughlin.

Worth over $987 million in export earnings in 2009, and set to reach over $2 billion by 2020, the kiwifruit industry will continue to play a significant role in achieving Horticulture New Zealand’s export earnings target of $10 billion by 2020.

“A change in the industry structure would prevent the realisation of these growth targets and would be a backwards step for the country. New Zealand growers realise the value of our industry structure every single day – growers do not trade in economic theory, they deal in economic reality.”

“The success of the New Zealand kiwifruit industry is the envy of other primary producers. Deregulation would promote price competition amongst New Zealand exporters which would lead to a drop in export earnings with many orchardists forced to exit the industry –this is not a viable strategy for productivity growth. An example close to home is the apple industry which was deregulated in 2001 - its export earnings have stagnated, remaining at similar levels to 2001 ($339m).”

Mr Loughlin says the structure of the kiwifruit industry is critical to the continued success of the industry and the horticulture sector. The regulated structure puts ZESPRI as the primary exporter to countries other than Australia. Other companies can export kiwifruit through Collaborative Marketing arrangements, which are independently approved by industry regulator Kiwifruit New Zealand.

The New Zealand Government has clearly stated its position that it will support ZESPRI and the regulated industry structure for as long as they have the support of growers. Deregulation is therefore not on the agenda. “Growers will appreciate the level of confidence this provides for continued investment in orchard productivity, research and innovation, and export market development,” said Mr Loughlin.

ENDS

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