Saturday, December 9, 2023

Sir John key to Zespri’s China fruit woes

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Former PM roped in to high-level talks aimed at resolving IP issues.
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Former prime minister Sir John Key has been bought in to top-level negotiations between Zespri and Chinese officials to try to resolve the issue of unauthorised SunGold kiwifruit being grown in China.

The issue of the illegally grown fruit has been a thorn in Zespri’s side for the past five years as the area under SunGold vines in Sichuan province has increased to about 8000ha, greater than the area being grown in New Zealand.

The fruit was illegally exported to China by a NZ company later found guilty of breaching plant variety rights and fined $15 million. The company went into liquidation and on appeal had its penalty reduced to $12.1m.

Sir John, Zespri CEO Dan Mathieson and chair Bruce Cameron met Chinese Foreign Minister Wang Yi in Beijing.

Mathieson said the meeting involved discussions around the importance of IP protection. 

“We have been encouraged by the support we’ve received from within China as we’ve sought to address the challenge of unauthorised Gold3 kiwifruit plantings in China,” he said. 

“This includes the steps taken to amend its Seed Law to grant stronger protections to investors in plant varieties. The unauthorised plantings remain a significant challenge with around 8000a in the ground in China, putting at risk the significant investment by growers through the potential for oversupply,” Mathieson said.

 Two years ago, kiwifruit growers were given the opportunity to vote on whether or not to allow Zespri to run a trial allowing Chinese growers to use Zespri marketing and standards to sell the fruit. The vote required 75% support but fell short, at 70%.

Mathieson said strong IP protection would be critical to any such partnership, which would rely on New Zealand grower support. 

“Zespri has also launched legal action in China as part of our efforts to address the issue,” he said.

While the pace of SunGold plantings in Sichuan has slowed, it remains an ongoing concern for Zespri amid risks that the fruit could spill into the company’s export supply calendar,  affecting price points and quality standards for the premium fruit’s category. 

Zespri has managed to achieve more robust protection of its brand in China in recent years, being afforded the sort of copyright protection granted to global corporations including Nike and Disney. 

It is also now possible to seek prosecution of retailers of the fruit, rather than just orchard growers.

Sir John was instrumental in reinforcing the Chinese-NZ free trade agreement that was signed off under the  Clark-led Labour government in 2008. During his tenure as PM he made seven state visits to China and reinforced several primary sector deals, particularly for dairy.

“The foreign minister was very complimentary of Zespri’s track record here and commitment to the China market and of New Zealand’s high-quality produce. He was reassuring that New Zealand could have confidence in China,” said Sir John.

“We also respectfully raised the issue of the unauthorised plantings and the foreign minister was very understanding of the issue and committed that the matter would be handled according to the law.” 

In Focus:  Fonterra farmers the focus of emissions plan

Fonterra has revealed its plan to reduce on-farm emissions by 30% by 2030. Bryan unpacks the plan with Federated Farmers dairy chair Richard McIntyre (skip to the 20:10 minute mark). 

In this week’s feature interview, MyFarm boss Andrew Watters talks about what he calls the third wave of land-use change and the options available to farmers looking to diversify their income (skip to the 8:50 minute mark).

And Richard Rennie reflects on his day on farm with a Bay of Plenty catchment group and talks about how Sir John might be the key Zespri is looking for as it deals with unlicensed SunGold fruit being grown in China (skip to the 1:20 minute mark).

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