Kiwifruit marketer Zespri has been busted for trying to block sales of cheaper rival Chilean kiwifruit in South Korean supermarkets and has been fined nearly $500,000, according to the Dominion Post.
South Korea is a key market for Zespri, worth $109 million last year, out of total exports of about $1.5 billion to 60 countries.
Zespri sent about seven million trays of fruit to South Korea last year, about half green and half gold fruit.
However, Zespri says the large fine will not directly hit kiwifruit grower returns per tray. Instead, the money will come from Zespri’s “corporate fund” – a commission from each tray sold.
The South Korean Fair Trade Commission yesterday fined Zespri 427 million won (NZ$492,000) for anti-competitive behaviour, after a complaint from Chile about Zespri’s deal with two leading supermarket chains in Korea to sell only New Zealand kiwifruit.
The fine was more than twice what growers were led to believe was possible earlier this year.
Independent Kiwifruit Growers Association member Ted Meade, from Katikati, in the Bay of Plenty, said Zespri’s chairman and chief executive had told growers at a meeting earlier in the year that the anti-competitive fine would be “no more than US$150,000 (NZ$197,000)”.
“Growers are up in arms over this non-competitive monopolistic behaviour overseas,” Meade said, and they wanted to be sure the cost would not be borne by growers, who were already suffering the impact of the vine disease, Psa.
Meade accused Zespri of misleading growers about the size of the fine “and that it was nothing to worry about”. “They cast it off,” Meade said.
A Zespri spokesman said a fine of about US$150,000 was expected earlier in the year, but staff had not yet seen the full decision.
“We can’t really give any insight to why that figure may have changed or what their thinking was,” Zespri’s David Courtney said.
Meade said the fine might also harm Zespri’s long-term access to the lucrative South Korean market, and affect free-trade talks with the country. A free-trade deal could lead to removal of the 45% tariff on kiwifruit in that market, he said.
The fine was imposed after Zespri signed a sales contract with E-Mart in Korea on condition the country’s biggest supermarket would not sell cheaper kiwifruit from Chile.
Zespri signed a similar deal with Lotte Mart, the country’s third-largest supermarket chain.
After the cheaper Chilean fruit was blocked from E-Mart last year, the price of Zespri’s green kiwifruit went up 13%, to almost 700 won (NZ80 cents) on average.
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