Zespri accused of attempting to intimidate Kiwifruit NZ over China deal

Kiwifruit NZ chairwoman Kristy McDonald​, QC, has claimed that Zespri chairman Bruce Cameron​ attempted to "browbeat and intimidate” industry regulator Kiwifruit NZ into "rubber-stamping" a contentious business deal in China.

The allegedly offensive and threatening phone call was documented by Ms McDonald in a November letter.

Kiwifruit NZ (KNZ) three weeks ago declined Zespri's proposed project, a three-year trial run at buying and branding 1.95 million trays of counterfeit SunGold kiwifruit that is being grown in China on vines stolen from the company. Zespri says it will rework its proposal and again seek approval.

In the November letter to Cameron and the Zespri board, obtained through the Official Information Act, McDonald said in a Friday evening phone call Cameron made comments that were “threatening both personally and to KNZ” reported Stuff.co.nz.

She said he was attempting to “browbeat and intimidate me and KNZ into rubber-stamping Zespri's proposed activity without undertaking any proper assessment of it”.

“What unfolded in your call to me was a series of threats, demands and accusations. I will say little more about your outburst as I suspect it was a reflection of poorly controlled emotion.”

McDonald said it appeared Cameron and Zespri chief executive Dan Mathieson​ had since early in 2020 provided “misleading” advice that it would not seek to begin the China project until late-2021.

The company, on October 28, submitted a proposal that included supply agreements as early as November or December 2020, she said.

“Your comments that this is urgent, must be approved by Christmas and that we should not (you said ”must not”) use external expert advisers is remarkable,” McDonald wrote.

“KNZ has not even considered the proposed activity yet you are most certainly getting well ahead of yourself in trying to control the outcome of a process that is not yours to control and has not even started.

“We will work as expeditiously as we can ... What we will not do is bow to threats, bullying and intimidation.”

In a response to media coverage of the incident Zespri Chairman Bruce Cameron said, “The letter was written following a discussion in November about the process we were going through as we sought regulatory approval to allow us to act on the plantings. I reject the way the conversation has been characterised but acknowledge the concerns raised by the Chair of KNZ. Zespri respects the critical role the regulator KNZ plays in the industry.

“We do need to have an effective working relationship with KNZ. This situation demonstrates we have not yet achieved that but we will continue to strive to do so. Zespri has been working through the regulatory process with KNZ over many months to allow us to act as fast as possible to try and limit any further increase in the scale of the plantings, while following the proper regulatory process.

“We will continue to work hard to build an effective relationship with KNZ in the best interests of the New Zealand industry. This will include continuing to seek clarity on KNZ’s requirements of Zespri and to ensure we fulfill our regulatory obligations while remaining focused on the critical issues facing the industry today. Our intention is to hold a Producer Vote in June.”

Zespri wants to trial the commercial arrangement with Chinese growers in the hope of commercialising some of an estimated 4000ha of unlicensed SunGold kiwifruit being grown in China.

The three-year trial has been touted both as a “win-win” for both Zespri and Chinese growers, and necessary to encourage the Chinese Government to enforce Zespri’s rights over the SunGold product.

KNZ in January decided Zepsri’s proposal was "more than low risk" to the interests of kiwifruit growers, and therefore did not meet a regulatory threshold for approval.

As Zespri has a state-sanctioned monopsony, a form of monopoly, on the export and marketing of New Zealand-grown kiwifruit, it must seek permission from KNZ or the industry’s 2,792 growers to operate outside its legal mandate.

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