Zespri to reconsider approach to China Gold3 plantings

Media Release

02 Jul 2021

Zespri will work with the New Zealand and Chinese industries on an alternative approach to the unauthorised Gold3 plantings in China after the threshold of 75 percent grower support for the proposed commercial trial was not met.

Final results show 70.5 percent of growers supported the primary resolution to carry out a one-year orchard monitoring, procurement and sales and marketing trial in China. A total of 64.1 percent supported the secondary resolution to use the Zespri brand label as part of the sales trial in order to understand consumer response. While this is a high level of support, under the Kiwifruit Export Regulations, 75 percent support (by individual votes and fruit weight) is required for each resolution to pass in the Producer Vote.

Zespri Chief Executive Dan Mathieson acknowledged the extensive engagement by the industry in what is a challenging and ongoing issue.

“We proposed the Gold3 trial after extensive due diligence and a range of expert advice suggested it was our best option to learn more about the unauthorised plantings, including the potential impact on our brand and sales channels. It would also have helped us begin to understand whether a commercial solution was achievable.

“China is an important market for Zespri, with 20 percent of New Zealand kiwifruit sold there. It is also the world’s largest kiwifruit producer with a rapidly modernising industry.

“We will continue to explore our options and engage on the issue and find an alternative way forward.

“As part of this Zespri has a range of initiatives underway in China. This includes our R&D partnerships, our efforts to understand the local production and supply chain environment and our engagement with the Chinese kiwifruit industry and Government. It remains important we stay close to the issue on the ground.

“We will also continue to work with our valued commercial partners and to strengthen our relationships and the Zespri brand.

“We remain absolutely committed to providing our Chinese consumers with fresh, healthy and tasty Zespri Kiwifruit and accelerating our efforts to expand beyond the 50 cities we currently sell to in China. We are also investing significantly in developing other markets around the world including in Asia, Europe and North America.”

Mr Mathieson confirmed Zespri would keep engaging with growers and the industry as the ongoing research work in China provided more information, and as it developed next steps to address the unauthorised Chinese Gold3 plantings.

 

 

What happens now?

China remains an incredibly important market for us so we will continue to focus on providing our consumers there with Zespri’s premium quality kiwifruit. With regards to the unauthorised plantings, they are likely to continue to grow and China will remain the world’s largest producer and consumer of kiwifruit. The team on the ground will continue to work with the industry in China to understand fruit performance and characteristics as well as the supply chain so we can continue to increase our understanding and come up with an alternative way forward. We’ll also continue with our R&D partnerships and strengthening our relationships with the Chinese government and industry.

What other options does Zespri have to address the unauthorised plantings?

Now we’ve had the vote we will seek to understand the concerns that some growers have raised. We will explore other options and we’ll discuss those with industry. We will also be looking to accelerate our in-market plans for new sales territories to build demand during the clear southern hemisphere selling window. We will also continue to engage with officials in both countries to keep the issue of unauthorised PVR spread front of mind. Legal avenues for addressing the spread of Gold3 will also be closely assessed although these avenues have proven difficult in the past.

When will there be another update on the level of unauthorised plantings?

As we did this season, Zespri will look to assess the level of spread early in the new year once the grafting window has taken place to try and get a sense of spread. It’s important we keep the New Zealand industry informed of the situation on the ground in China.

What does this mean for Zespri operating in China?

Zespri remains committed to China. It is an incredibly important market for us. While we will not be undertaking the commercial sales trial in China this season - it does not change our commitment to the China market. China remains one of our most important markets and we have deep and established relationships with our Chinese distribution partners and key accounts. We will continue to invest in and develop these channels with a focus on positioning our New Zealand sourced fruit as a premium offering to our loyal Chinese customers.

Will there be another vote on this?

We will continue to explore our options and seek an alternative way forward. We will keep engaging the industry in this discussion.