NZ Must Get Green Kiwifruit Out of the Red

NZ Must Get Green Kiwifruit Out of the Red

Turners & Growers Managing Director, Jeff Wesley today said monopoly kiwifruit exporter, Zespri had been too slow to respond to the plight of green kiwifruit growers and poll results of grower sentiment won’t change the fact that the continuing decline in Orchard Gate Returns (OGR) for green growers will drive many out of the industry unless they can convert to lucrative new varieties.

The majority of the country’s more than 2,000 kiwifruit growers are still locked into producing the green Hayward kiwifruit variety, which has faced oversupply and declining prices in international markets for several years. The options for green growers are limited because Zespri controls the only new varieties that can be exported.

Furthermore, many of the existing green growers are unlikely to be in a position to afford to tender successfully for Zespri Gold or any Zespri varieties that may be made available in the future.

Zespri’s Green Outlook 2008/11 stated “34% of GREEN growers are anticipated to have a Net Orchard Return below zero for the 2008/2009 season, making these businesses unsustainable.” The updated Outlook stated that the OGR of $3.46 “is not satisfactory” and that the competitive environment continues to intensify with Chile increasing its production of Hayward by 50% over the next three years.

Jeff Wesley said Zespri is the last monopoly of its kind in the world and like those that have gone before it, its legacy will be a costly ‘tail’. “Monopolies, typically by their nature, become unresponsive and are too slow to react to consumer demand and market changes. That’s what has happened to our green industry, which should have been moving to new varieties several years ago.”

The monopoly is at odds with the Government’s stated objective of cutting red tape to unleash New Zealand companies to invest in innovative, new products that will be internationally competitive.

Turners & Growers hold the global and regional Intellectual Property Rights to new kiwifruit cultivars that will convert unprofitable Hayward orchards to profitable new varieties.

Jeff Wesley said kiwifruit growers are in a unique position in the horticultural industry to be able to quickly convert to higher value crops. “An existing green Hayward orchard can be grafted over to a new variety and produce fruit within two years. Within three years the grafted plants can be up to full production.”

Turners & Growers have already converted many of their own Hayward vines in New Zealand to the new varieties that the company owns or holds the rights to, such as ENZAGold and Summerkiwi. Next year Turners & Growers will be grafting several thousand ENZARed plants on their orchards, following the international success of the ENZARed, the world’s first commercialised red kiwifruit variety.

Turners & Growers also has a number of other exciting new kiwifruit cultivars that they are currently evaluating for further development.

In Kerikeri, New Zealand’s first pick of ENZA’s Summerkiwi, an earlier, sweeter, green variety, is about to begin, marking another step in the varieties’ commercial development here. Jeff Wesley says Summerkiwi has proven itself to earn a premium over Hayward fruit in the European market and when in full production here, it has the potential to sell up to 12 million trays internationally earning up to $96 million dollars annually.

Jeff Wesley said Turners & Growers wants the right to grow and export its own varieties. Once the monopoly is removed, every grower who wants to supply Zespri can remain with them and that won’t change. Growers who want to choose new and more profitable cultivars and who exports them will be able to do so.

ENDS

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