In the hopes of buying counterfeit golden kiwifruit grown on vines stolen from the company, kiwifruit giant Zespri has signed the beginnings of a commercial deal with a state-owned Chinese firm.
The bid to buy into an estimated 4000ha of unlicensed SunGold kiwifruit in China is yet to be signed off by Zespri’s regulator, but with China’s growing season on the horizon and the volume of counterfeit fruit expected to grow, there is pressure to ink a deal that could help save Zespri’s sizeable stake in the Chinese market.
Signalling a willingness to provide technology and advice to Chinese growers of kiwifruit vines that were stolen from the company, Zespri has signed a ‘memorandum of intent’ with a Sichuan-based company. The arrangement has been touted by Zespri as a win-win for both New Zealand and China.
“We hope that with our world-leading management technology and best practices, we can help Chinese growers improve their growing techniques and increase their income,” commented Zespri chief executive, Daniel Mathieson.
A statement provided by Zespri said the growing of unauthorised SunGold was an immense challenge and that the memorandum of intent was a symbol of the company’s willingness to run the trial, which would begin with Zespri buying 650 tonnes of fruit from Chinese growers in its first year. Zespri would then brand the fruit and sell it to Chinese consumers.
At its annual meeting in August, Zespri said there was now an estimated 4,000ha of SunGold being illegally grown in China. At $161,660 in returns per hectare, this could amount to more than $645 million worth of counterfeit fruit that would come onto the Chinese market in August – competing with late-season New Zealand fruit.
Zespri has a ‘single desk’ monopoly, meaning all Kiwifruit growers must sell their fruit to the company for marketing and export. Because of this market dominance, Zespri’s operations are regulated by Kiwifruit New Zealand and the Kiwifruit Export Regulations. The law says Zespri is legally confined to marketing and developing the market for New Zealand-grown fruit.
Kiwifruit New Zealand chief executive Geoff Morgan said the proposed arrangement with Chinese growers was outside Zespri’s “core business” and required sign-off from KNZ. As per the law, KNZ would decide whether the project supports Zespri’s core business and is low-risk to growers. A draft decision is expected in late-January.
Chinese growers began illicit plantings of Zespri’s SunGold variety, also called G3, possibly as early as 2013.