Zespri welcomes the announcement by the New Zealand Government today that it has approved the amendment of the Kiwifruit Export Regulations.
Zespri Chairman Peter McBride says that the updated regulations will enable Zespri to recommend changes to its constitution to align shareholding of the company more closely with production.
“Our industry asked the government to update the regulations to allow us to develop a sustainable and long-term plan to maximise the wealth of New Zealand kiwifruit growers. That means taking action to develop the broadest-possible alignment between total production and shareholding, to strengthen grower ownership of the industry,” says Mr McBride.
Over time, the New Zealand kiwifruit industry has seen a growing misalignment between growers who supply kiwifruit to Zespri and people who own shares in Zespri. One reason is that orchards have been bought and sold but those leaving the industry have not always sold their shares to existing growers. A result is that a number of growers do not own shares.
Zespri now intends to hold a Special Meeting, as soon as practically possible following consultation with shareholders, to ask shareholders to support changes to its constitution designed to improve shareholder alignment, including increasing the number of growers that own shares.
Zespri plans to support this process by carrying out a targeted share buyback and issue programme next year. These measures require shareholder approval and would come into effect over a number of years. Zespri will communicate further details about the planned recommendations at its annual meeting on 24 August.
In addition, the Government has updated the definition of Zespri’s core business in the regulations. The change acknowledges that Zespri’s model has evolved, and recognises that research and development, market development and marketing are essential in leading the world in delivering quality kiwifruit and providing strong sustainable returns to New Zealand growers.
The regulatory change is a significant milestone in a comprehensive industry review process spanning three years, including a grower referendum in 2015 that had the highest turnout in a horticultural referendum in recent history.
“I would like to acknowledge Minister Nathan Guy again for his strong support of the industry and the Ministry for Primary Industries for their hard work throughout the process,” says Mr McBride.
- The regulatory amendments follow an extensive strategy review and consultation by the kiwifruit industry that began in 2014, called the Kiwifruit Industry Strategy Project (KISP). The regulations were put in place 18 years ago.
- Two-thirds of growers, representing 80 percent of production, voted in the KISP referendum which set out recommendations for the industry. Some 92 percent of growers who voted supported the KISP recommendations on measures to improve alignment between total production and grower shareholding.
- At KISP’s heart is the objective of delivering sustainable wealth to New Zealand kiwifruit growers, the wider kiwifruit industry and the communities that rely on our industry.
- Significant progress has been made since the KISP referendum in putting in place a number of other measures that growers voted for:
- Zespri and collaborative marketers have started to work more proactively to develop markets.
- The regulator Kiwifruit New Zealand has been provided with a broader skill set and more independence.
- Changes have been made to strengthen and streamline the New Zealand Kiwifruit Growers Forum.
- Māori kiwifruit grower representation in the industry has been strengthened through the formation of the Maori Kiwifruit Growers forum.
- The appointment of a market maker to facilitate Zespri Group Limited share trading has seen a significant improvement in liquidity and a reduction in price volatility in Zespri shares.