Kiwifruit industries in every other country are hard pressed to make a dollar, says Richardson, independent chairman of the Kiwifruit Industry Strategy Project. Yet the New Zealand industry is “incredibly profitable, sustainable, and has dealt with Psa effectively”.
“That’s a reflection of the structure and the single desk is a very important part of that,” he says.
Single point of entry (SPE) means Zespri is the sole marketer of New Zealand kiwifruit to all exports markets except Australia.
Richardson says New Zealand is highest cost producer in the world and is furthest from the markets, yet it has the highest market share and is “massively” the most profitable. That shows the “huge” value in its structures.
Richardson says one reason he agreed to head the strategy project was because he could see conversations going on which could lead to confusion and New Zealanders leaving the kiwifruit industry. He has seen overseas interests buying up assets in other industries “for a song”, putting them on the balance sheet and making a lot of money. As a businessman he has done it himself, selling companies to the French, Australians and Americans. But he wants his grandchildren to have jobs in New Zealand in world-class industries.
“Overseas companies will always pay more for our companies than we’ll pay for them. That’s the nature of the stock exchange.”
Overseas investment is important but must be done in a considered way. “We mustn’t lose our sovereignty. In the timber industry, when Carter Holt was a New Zealand company it wanted to get the best price for its timber for its New Zealand shareholders. When it
was owned by an American it wanted to source its timber out of New Zealand for the lowest cost.”
New Zealand kiwifruit is a big industry by New Zealand standards, earning $1 billion annually in exports which could triple in a decade. “One of the challenges in a smaller industry with individual growers is they can be picked off. The single point of entry is a way to keep the power in the hands of the New Zealand growers, not allowing them to be picked off one by one by organisations up the value chain who have global markets and come from other countries.”
The SPE enables the industry to innovate in the marketplace so kiwifruit, a perishable crop, becomes a 12-months product in the supply chain. “That enables the New Zealand kiwifruit industry to command a premium over other kiwifruit producing nations. It also ensures the industry has the capability to respond to things like Psa.”
NZ Kiwifruit Growers president Neil Trebilco told Rural News he had heard about proposals from overseas interests wanting to buy orchards on a relatively big scale. That was fine if it was done in partnership with growers. “What we don’t want to lose is New Zealand ownership and control,” he says. That is now happening in the apple industry where companies and now orchards are being bought by overseas interests.
“But because the average orchard size is only 4-5ha and we don’t have the degree of aggregation you might have in other industries, for someone from outside to buy a whole series of orchards and put them together is quite a nightmare. So it’s a disincentive for someone to come in and buy a whole lot of orchards.
“Because the industry is grower owned and controlled and has relatively small orchards, it’s a deterrent.”
