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Zespri told to rethink collaboration

NZ NewswireNZ Newswire 6/05/2016 Fiona Rotherham

The High Court has told kiwifruit marketer Zespri to reconsider collaborative marketing proposals from Splice Fruit and Seeka Kiwifruit to sell fruit offshore that its board had previously rejected.

When Zespri was set up in 1999 the government made it the sole entity entitled to export kiwifruit to anywhere other than Australia but also allowed for collaborative marketing where third parties can seek approval from the board to export in association with Zespri.

Te Puke kiwifruit exporters and marketers Splice Fruit and Seeka Kiwifruit sought approval from the High Court at Tauranga for a judicial review of three board decisions last December rejecting collaborative marketing proposals in the 2016 export season.

Splice wanted to export 400,000 trays of green Class I fruit to Austria while Seeka wanted to export 400,000 trays of green fruit to Hainan Island in China and 120,000 trays of green fruit to Xinjiang province in China.

A fast-tracked court hearing was held because the 2016 season is already underway.

Seeka chief executive Michael Franks told the court the appeals process was important because members of the board committees making the decision on collaborative marketing "often have conflicts of interest" as they are direct competitors.

Zespri had legal advice from senior counsel in November that the board had no jurisdiction to hear appeals.

However Justice Paul Heath said in his written judgment that "it was open to the board to regulate its own procedure by incorporating a review process of that type, whether the label 'appeal' or 'review' is used is beside the point."

Based on past experience, both kiwifruit exporters were entitled to believe a process of that type would be followed if applied for, he said, and a rehearing by the board or a nominated committee is necessary in all three cases.

Kiwifruit New Zealand's 2014/15 annual report shows collaborative marketing volumes dropped during the season to 1.6 million trays out of 97 million trays exported.

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