New Zealand kiwifruit producer, Zespri’s attempt to buy counterfeit Chinese golden kiwifruit has been rejected by a governmental regulator, according to the news outlet Stuff.

The company reportedly signed the beginnings of a commercial arrangement with a Chinese state-owned firm late in 2020, with the intention of stemming illegal growing and commercializing some of the estimated 4000 hectares of unlicensed SunGold kiwifruit that is being grown in China on stolen vines.

The hope for the agreement was that it would encourage the Chinese Government to enforce Zespri’s rights over the SunGold product. It was originally meant to be a three-year trial and was considered to be advantageous for both Zespri and Chinese growers.

However, the regulatory body, Kiwifruit New Zealand (KNZ), rejected the proposal, viewing the agreement as too much of a risk to New Zealand kiwifruit growers.

According to a summary of the decision, cited by Stuff, the trial was deemed “more than a low risk” which, did not meet regulations. 

KNZ chief executive Geoff Morgan was quoted as saying that, among independent advice received, the regulatory body considered six potential risks to growers, such as grower returns, brand reputation, market access through the NZ-China relationship, and orchard practice and intellectual property.  

“New Zealand is definitely the world leader in Kiwifruit orchard practices ... So to transfer intellectual property around that to a country that has a huge scale and an ability to produce a very large volume of fruit, far in excess of anything New Zealand produces, is definitely a concern.”

It hasn’t been specified exactly what risks the proposal was considered to present as it was withdrawn by Zespri in order for changes to be made. An adjusted version is expected to be submitted.

Carol Ward, Zespri's chief grower, industry and sustainability officer,  stated that there was a “broad array of risks” attached to the deal, including the need to protect the quality of the kiwifruit carrying Zespri’s brand, to protect intellectual property in China, and to maintain positive relationships, including with the Chinese government.

She was cited as having said the company needed to “bring about some level of control” to the unauthorized planting of SunGold, and would adjust the proposed commercial arrangement to again seek sign-off from KNZ and growers.

“We needed to have a look at some of these risks ... We've had the feedback and withdrawn it, and now we want to work constructively and positively with the regulator with our growers to say, ‘how do we frame this and scope this’.”

Ward added Zespri may limit the trial to one year, instead of the proposed three, to gain the support of growers and that the company had received support from the Chinese government, but that these steps were necessary to stop the spread of unauthorized Gold3 [SunGold].

Stuff likewise reported China’s stance on the matter. A spokesperson for the Chinese Embassy in Wellington provided the outlet with a written statement saying China had strengthened its intellectual property enforcement and punishments as of January 2020.

 The country also expressed appreciation for “Zespri’s optimistic view of China’s economy”.