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Zespri’s power should be revoked

Zespri’s monopoly powers should be revoked, according to the 2025 Taskforce.

The group, created to generate ideas to close the income gap between New Zealand and Australia by 2025 said the legacy of the old monopoly producer boards is anachronistic.

“Competitive markets need to be promoted, not forestalled by government fiat,” the report stated.

“We are not persuaded by the test that the monopoly should only be removed when a majority of growers favour such a change.”

Zespri has since come out with a statement suggesting the 2025 reported is "completely unacceptable."

Zespri chairman John Loughlin said the recommendation would lead to a significant productivity drop and a reduction in New Zealand's export earnings.

Agriculture Minister David Carter is responsible for instigating any change to the rules that protects Zespri’s export monopoly status.

His response this year to questions posted by fresh produce processor Turners & Growers which is pushing for reform in the industry, left it in the hands of the industry.

Essentially, if there was wide kiwifruit grower appetite for change, it would be looked at.

However, the taskforce said in its report that it was not clear what public policy interest would justify a Zespri monopoly that prevented growers from selling their own fruit overseas themselves or through other companies.

“The vines are the fruit are private property. In successful market economies governments need a compelling public interest case to constrain property rights in such a way.”

Turners & Growers chairman Tony Gibbs, who has attacked Zespri’s position in the Auckland High Court this year with a statement of claim that said the company was acting unlawfully, said the report highlighted the need for a principled approach and political leadership on the issue.

“The report underscores the fact that the future of the kiwifruit industry is a future of competition and innovation and Zespri’s monopoly is not part of that future.”
 

More by Liam Baldwin

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Comments and questions
8

Groan, groan! What is wrong with these short sighted people. I guess it is all we could expect from Mr Brash, 25 years of the same old hackneyed policies dredged up from the beginning of the 20th century have not gotten NZ further ahead. We continue to fall behind the world. It is time for something new! Zespri is that new force beating the world and growing our business through innovation in varieties, marketing and branding! You are 15 years behind the rest of the industry Mr Brash. We tried free market and it bankrupted us! Lets get back to the future!

Telecom bad.
Zespri good.
I remember reading this line of thinking in a book somewhere

Telecom bad.
Zespri good.
I remember reading about this line of thinking in a book somewhere

Government Mandated Monopolies are the essential part of Communism that failed miserably.

Zespri may be a golden goose for a few but is a dog for the rest of us. It’s a matter of economics and principles versus political pork and privilege.

Interesting looking at the NZ Herald graph showing how much our economy has dived below OECD averge since 1984 and the start of free market policies. Only the blind or special interest groups would argue that these old polices are working for us.

Zespri is about grower democracy. We voted to take a failed industry from foolish multi marketers who bankrupted us to market our own products. We are still voting for it. Act and it's cronies want to demolish Zespri because of the wooly Monopoly is bad theory and on the other hand is building a mega monopoly in the Auckland super city. What kind of logic is ther in that?

Great analysis Steve. Very informed. Unfortunately you miss the point. Zespri is growers taking control of their own destiny. Growers voting is democracy isn't it, or have I missed the point of democracy? Acting against grower democracy, Just because you don't like the outcome, is no different to a military junta in a country not too far from here taking out the elected government because they didn't like the outcome of the elections. We are governed by a monopoly both in city and state that is established by a far smaller majority of voters than that enjoyed by the Zespri board.

Zespri with its single desk and collaborative marketing system came about because of the open border selling fiasco that almost collapsed the kiwifruit industry and required a government guarantee of $150 million to keep the industry going. Will Mr.Gibbs be willing to provide
the required $150 million loan after his open border policy has again wrecked export prices?. T and G policies are obviously self-serving.
The future lies with Zespri ,they have done extremely well and deserve praise.

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