• John Luxton
Associate Minister of Agriculture

Associate Agriculture Minister, John Luxton, today announced that, at the request of growers, the Government would be removing Kiwifruit New Zealand's monopoly on the supply of services from the coolstore to the ship. The intention is that the necessary amendments to the Kiwifruit Marketing Regulations will be in force by 1 April 1998.

Mr Luxton said today "My priority is that the incomes of growers are maximised. This means that we need to ensure that our structures are able to keep up with the changing world in which we trade. These changes will assist towards doing this.

"The amendments will result in six key changes to KNZ's operations:

- providing for KNZ to acquire fruit from suppliers other than producers;
- shifting the point KNZ takes title of fruit to the ship (free on board stowed, FOBS);
- providing for KNZ to make charges for fruit loss up to 10 days following discharge in the destination port;
- increasing the number of factors for price setting;
- rationalising fruit quality provisions and including process standards; and
- allowing KNZ to establish a supply chain management company.

"The key objectives of these changes are intended to result in continuing to provide a high quality fruit into the market, to give the most efficient distribution to FOBS, and to maximise the incomes of kiwifruit growers,' Mr Luxton said.

'If New Zealand is to maintain its position as a pre-eminent supplier of top quality kiwifruit to overseas markets, it needs to continually present the best product to the market. These changes will continue KNZ work to achieve that goal.

"The changes are also intended to increase grower choice and flexibility, with competition ensuring that the most efficient and cost-effective onshore services are available to growers.

"For the early period of operation of these changes, KNZ will be able to establish a supply services company. This will act as a safety net for the industry to ensure the change over to full competition between postharvest service suppliers does not result in some parts of the industry being unserviced.'

Mr Luxton said, however, that KNZ would be required to divest itself of the company within the first two seasons of the new arrangements.

He went on to say that KNZ would also need to satisfy a number of requirements to ensure the supply services company's competitive neutrality with any other like companies that might be established to service the onshore needs of the industry.

"During consultations and in submissions on these proposed changes many in the industry expressed concern about suppliers having little or no control over the fruit from FOBS yet remaining responsible for fruit loss for up 10 days following discharge in the destination port. "In response to these concerns, and in the interests of fairness and equity to suppliers, the Government has agreed that the regulations will include a number of checks and balances.

"For example, they will set out duties and responsibilities for KNZ if charges are intended to be made for fruit loss which will have specific times attached to them. The regulations will also include mediation and dispute resolution processes and require supplier/grower involvement in developing standards and conditions of operation,' Mr Luxton said.

"These changes are being made in response to requests from the industry which stem from the third stage of an industry Review completed in 1995. They are the first part of a two part package. The second part, which due to a range of constraints will be considered later this year, relates to corporatisation of the Kiwifruit Marketing Board.

"Timing to complete these amendments to regulations by 1 April 1998 remains very tight and I will advise the industry of progress as that date approaches,' Mr Luxton concluded.

Conor English, Press Secretary,
04 4719707