Chile: ASOEX head accuses Zespri of anti-competitive practices
The president of the Chilean Fruit Exporters Association (ASOEX) has claimed New Zealand should not be allowed to be part of the Trans-Pacific Partnership (TPP) because of what he alleges to be anti-competitive business practices by kiwifruit marketer Zespri.
Addressing the Business School of New York's University of Columbia, Ronald Bown said the single-desk marketer's actions had impacted negatively on consumers, Chilean exporters, and the whole global kiwifruit market.
This is not the first time a key figure from the Chilean fruit industry has accused Zespri of anti-competitive behavior, with Chilean Kiwifruit Committee president Carlos Cruzat last year taking fire at the organization.
"Zespri is a private company to which the New Zealand State has granted legal privileges, consisting of a monopsony and export monopoly, through the marketing structure called 'Single Point of Entry', which allows Zespri to be in charge of kiwifruit exports to all markets, except for Australia," Bown said.
He said Zespri controlled around 30% of the global kiwifruit market in terms of volume and approximately 60% terms of value, hindering growers from the likes of Chile, Italy, France and Greece.
"None of Zespri's competitors in the world are able to benefit from this kind of privilege, given their government's commitment, as is the case with Chile, to free trade," Bown said.
"It would be unthinkable that in these times a state could give the WTO [World Trade Organization] a trade condition like the one that the New Zealand Government still maintains and defends."
He also said the New Zealand Government's actions meant it should not be allowed to be part of the TPP free trade agreement, which is one of the largest regional trade deals in history and includes the likes of Chile, New Zealand, the U.S., Australia, Japan and Canada.
"We believe that no country that supports monopolistic activity of this sort, which hinders other countries, should be part of this organization, unless it finds quick solutions to the conflict," Bown said.
"In addition, we think that Zespri has so much power, thanks to this conditional privilege, which allow it to employ unfair practices, that even if these were eliminated, there would still be negative effects on free competition for fruit for many years."
He also claimed consumers had been affected by Zespri, alleging the entity's practices had pushed prices up and resulted in reduced access to fruit from other origins.
In 2011 the Korean Fair Trade Commission’s (KFTC) fined Zespri US$375,000 for anti-competitive practices, and demanded immediate suspension of exclusive contracts with retailers E-Mart and Lotte Mart.
Zespri was also later caught up in a scandal involving the under-declaration of kiwifruit import duties in China.
"We regret that it still has not been possible to limit, exclude or eliminate this type of conduct by Zespri, despite we as an association having made the New Zealand authorities aware of this situation, and of their responsibility," Bown said.
"What is left for us to do is publicly condemn these types of monopolistic and anti-free trade practices, for example, to university students who are learning and analyzing the character of international trade."
A Zespri spokesperson released a measured response to the claims.
"Consumers and customers around the world have a wide variety of choice about the fruit they buy and consume and Zespri Kiwifruit provides a premium quality, healthy, tasty option," the spokesperson said.
"Sales are set to grow strongly, as more and more people chose the great taste and consistent quality of our healthy products.
"Zespri is proudly owned by New Zealand kiwifruit growers and our structure complies with international WTO (World Trade Organization) laws."