ASOEX details complaints against Zespri

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ASOEX details complaints against Zespri

The Chilean Fruit Exporters Association (ASOEX) has released a statement explaining the complaints it has against New Zealand kiwifruit marketer Zespri.

In April, ASOEX president, Ronald Bown called on the General Directorate of International Economic Relations (DIRECON) for a national strategy to defend Chilean kiwifruit exports to ensure a global trading environment without “obstacles”.

“It’s relevant to have competition without obstacles from any participant on the international level, which isn’t always the case with Zespri which has a dominant position in markets, privileged by the legal status that protects it," he said in a release.

In a response given to Fresh Fruit Portal, Zespri spokeswoman Rachel Lynch emphasized that Zespri is committed to "acting fairly in all markets, abiding by local laws and regulations."

“Zespri is proudly owned by NZ kiwifruit growers and our structure complies with international WTO laws; the one finding of anticompetitive behaviour Mr Bown refers to in Korea was seven years ago and has been addressed,” she said.

“Zespri condemns anti-competitive behaviour and is committed to acting fairly in all markets, abiding by local laws and regulations.”

Lynch reiterated former Zespri CEO Lain Jager’s “standing invitation” to ASOEX to provide information on specific matters so they can be investigated.

Last year Bown told local Chilean newspaper El Mercurio he had communicated with the New Zealand company about an alleged “monopolistic attitude” in markets such as Malaysia, Japan and the United States. 

ASOEX's response

In a recent statement, ASOEX said it wanted to draw attention to several points, the first of which is its concern about Zespri's single point of entry system that it says provides the exporter with "insurmountable advantage over its competitors, who are not able to implement and benefit from that kind of privilege."

"We are alarmed by the existence of a supposed Regulator -Kiwifruit New Zealand [KNZ]- that does not behave as such, the obvious reason being that it is composed in its majority by Zespri shareholders," ASOEX said.

It added that it is "appalled by the impassiveness and inaction" of the New Zealand Government when asked about its responsibility for Zespri’s structure and conduct in international markets, "simply responding that it is a matter between private companies."

ASOEX also highlighted the "lack of reciprocity" generated by New Zealand's regulations that make it challenging for foreign growers to set themselves up in New Zealand, saying that "Zespri does precisely that in several countries around the globe."

The entity went on to allege that Zespri "misuses its commercial and financial leverage in many opportunities."

"Questionable situations are recurrent and have taken place not only in Korea, where Zespri was ultimately found guilty and fined, but also in China, Taiwan and other Asian nations," it said.

"Our Association has received and keeps receiving reports of importers and exporters being blocked in these markets, such as the episode in Malaysia last year, where only after we sent a letter to the Zespri CEO, complaining about Zespri’s conduct in that country, did the blockage stop. A similar situation occurred in the USA few [sic] months ago."

Responding to Zespri's claims that the inconsistent quality of Chilean kiwifruit undermines its position in the market, ASOEX said that it was more cumbersome for Chilean exporters to keep a consistency "comparable to that of the products of a monopoly".

ASOEX also alleged that Chilean kiwifruit exporters have for years tried to enter the Japanese market - where it says Zespri has a 96% market share - but has been "systematically blocked by Zespri and its local distributors".

"In this respect, we note that there is an ongoing investigation by the Japanese Fair-Trade Commission of Zespri’s exclusionary practices in this market," it said.

It also criticized how in Italy, Zespri "gives away its varieties to a privileged group of growers, without a license fee," in contrast to how it operates in New Zealand.

"The clear aim of these actions is to become the leading kiwifruit supplier all year round by entering and dominating counter-seasonal Northern Hemisphere markets, suppressing existing and potential competition," it said.

Finally, ASOEX said that the way Zespri and the Government of New Zealand are aligned is "surprising and shocking".

"The Government of New Zealand keeps in place regulations that provide Zespri with an unfair advantage in international markets that in turn generate huge returns for New Zealand," ASOEX said.

"The maintenance of these archaic privileges and their defense with spurious arguments is untenable and incoherent with the negotiation of trade agreements New Zealand is currently seeking.

"For these reasons we consider that Zespri’s declarations are a mere distraction from what should be the main focus of attention in this issue: that Zespri’s system and conduct are at odds with New Zealand’s international trade commitments and put at risk the global kiwifruit industry."

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