Regulations review evaluates NZ kiwifruit export industry shake-up
Collaborative marketing and greater accountability at Kiwifruit New Zealand (KNZ) form part of a significant government review discussion paper released today by the Ministry of Primary Industries (MPI).
The proposed amendments cover a wide range of issues relating to the Kiwifruit Export Regulations 1999, with the MPI accepting written submissions on its proposals until March 25.
The essence of the document is that conditions have changed since the regulations were written up, and it seeks to encourage the continued growth of single desk marketer Zespri while also making sure it does not veer too far from its core activity of exporting the country's kiwifruit.
The company has made strides in innovation and research in recent years, particularly through the Psa-tolerant variety G3, and it also makes money from licensing varieties to growers in Northern Hemisphere countries such as France, Italy, South Korea and Japan.
The document highlights how an increasing part of Zespri's revenue comes from these business activities outside of the export of New Zealand-grown fruit, in a business environment where a growing portion of kiwifruit suppliers "will not own Zespri shares and will not directly benefit from Zespri undertaking these activities".
The discussion paper takes stock of the Kiwifruit Industry Strategy Project (KISP) which was approved in a vote by the country's growers last year, as well as MPI's own analysis and an independent review undertaken by Waikato University's Institute for Business Research.
Attention is given to Zespri as a "monopsony buyer" of the country's kiwifruit to export destinations other than Australia, as anyone wanting to export their own varieties has to go through a Kiwifruit New Zealand (KNZ) approval process and work in conjunction with Zespri.
"The Review also concluded that there has been limited uptake of collaborative marketing opportunities to date, and that it could be more central to industry operations going forward," the paper says.
"Improving collaborative marketing uptake would increase the volume of export of New Zealand-grown kiwifruit, and the overall wealth being generated for the industry and the economy as a whole."
The discussion paper also said KNZ and its relationship to the government and accountability structures should be updated, with a view to enhancing the body's status as an independent regulator.
"This is the first comprehensive review of the regulations since they were enacted,” says Jarred Mair, MPI’s Acting Deputy Director-General Policy and Trade.
"The current regulations have enabled New Zealand’s kiwifruit industry to compete effectively on the international stage. In 2015, New Zealand exported kiwifruit to 50 countries, valued at (NZ) $1.003 billion.
"New Zealand’s domestic and global trading markets have changed markedly since 1999, and so has our kiwifruit industry. While the current regulations are generally operating well, we are proposing to fine-tune aspects of their operation to enable the kiwifruit industry to take advantage of emerging opportunities for growth."
KNZ welcomed the review, emphasizing the regulations had served the industry well for 16 years but the local industry and the international fruit industry had changed a lot over that time.
"KNZ agrees with much of what the review has to say," said KNZ chair Kristy McDonald QC
"We have worked closely with the reviewers and MPI to ensure all aspects of the regulations have been covered, and we look forward to contributions and input from industry players so the regulations remain fit for purpose and reflect the needs of the industry today and into the future.
"Our role, as an independent entity, is to safeguard the interests of growers by ensuring Zespri works in their best interests and to ensure it meets its international trading obligations. That is what we will continue to do."