Developing a sustainable and long-term plan to maximise the wealth of New Zealand kiwifruit growers.
The aim of the Kiwifruit Industry Strategy Project (KISP) was to jointly develop a strategy to maximise Zespri’s ability to achieve the New Zealand kiwifruit industry’s long-term market, strategic and financial performance for the financial benefit of New Zealand kiwifruit growers in a changing global market with the wide support of key industry stakeholders.
|Topic||Detail||March 2015 KISP referendum result||Competed?|
|1. Single Point of Entry (SPE)||Growers were asked if they support the SPE as the kiwifruit industry’s marketing structure||97% of respondents voted in support of the SPE.||Yes.|
|2a. Grower Ownership and Control of Zespri||KISP recommended removal of regulations that restricted the ability of Zespri shareholders to amend Zespri’s constitution||92% of respondents supported removal of the regulations||Yes. Regulations were revised July 2017|
|2b. Grower Ownership and Control of Zespri||Growers were asked if they supported changes to Zespri’s constitution to allow for alignment between growers and shareholders. This included specific changes to ‘dry’ or non-producing shareholders and those producers that held shares in excess if four times their production.||92% of respondents supported the ceasing of dividends for ‘overshared’ shareholders.
|In progress. Producer and non-producer shareholders will be asked at the 14 March 2018 Zespri SGM if they wish to adopt the recommended changes to the Zespri Constitution.|
|3. Changes to Zespri’s funding system||Growers were asked if they agree that Zespri’s commission should be based on an EBIT of 2% on sales, the payment of on- and offshore overheads, non-plant variety innovation costs, and excess taxation.||92% of respondents supported this.||Yes. Changes to Zespri’s funding system were signed and came into force in December 2017.|
|4a. Grower Representation and Reporting||Changes to the structure of NZKGI were proposed including reducing the size and representatives of the Forum.||94% of respondents agreed with these changes.||Yes. Rules were updated in July 2015|
|4b. Grower control of Supply Agreement/Supply Chain/Market Signals||Proposals suggested as to how decisions are made within these areas||94% of respondents agreed with these changes.||In progress. NZKGI has developed training for supply entities and growers on the supply agreement|
|5. Zespri Board||Changes were suggested to have three independent board directors and to make the terms for all directors to be three years.||95% of respondents agreed with these changes.||Yes|
|6. Kiwifruit New Zealand Board||Growers were asked if they agree that growers elect the majority of board members and that the board have the appropriate skill set||95% of respondents agreed with these changes.||Yes. Changes to the regulations were made in July 2015 to provide for 3 grower elected positions and 3 independent positions.|
|7. Kiwifruit Export Regulations 1999||That ‘core business’ includes kiwifruit activities Zespri undertakes for the financial benefit of New Zealand growers||92% of respondents agreed with these changes.||Yes. Changes to the regulations were made in July 2015|
|8. Collaborative Marketing||It was proposed that collaborative marketing become a more integral part of the industry’s market plans and that the funding for collaborative marketing be more flexible.||92% of respondents agreed with these changes.||Yes. Changes to the regulations were made in July 2015|
Kiwifruit Regulation Update
Key to obtaining several of the desired outcomes of the KISP project was a update to the kiwifruit regulations which was achieved in August 2017.
The revised Regulations address three main areas: Shareholder alignment, Zespri’s core business and the governance and funding of the regulator Kiwifruit New Zealand (KNZ). The regulations will enable greater alignment between growers and shareholders. The expansion of the definition of core business will provide stability to Zespri as the industry grows, maximizing the wealth of New Zealand kiwifruit growers.
The regulations make significant changes to the governance and funding of KNZ and while growers no longer have a majority on the KNZ Board, there will be some benefit in having independent expertise available. As supported by the KISP referendum, KNZ now has greater flexibility in funding their operations but also enhanced reporting requirements.
NZKGI has worked closely with MPI throughout this process to obtain a desirable outcome for New Zealand’s kiwifruit growers. NZKGI will maintain close interest in how the regulations are implemented, particularly with regards to resulting changes to the Zespri constitution that will take place as soon as practically possible following consultation to ensure the interests of growers are the focus.
Zespri Share Ownership
A significant outcome of the KISP process was the support from growers for changes to Zespri share ownership which would allow for alignment of shareholders and producing growers. With the updating of the Kiwifruit Regulations in 2017, Zespri is now working with Growers and Shareholders to implement the changes through a change in the Zespri constitution. For more information, check Zespri’s KISP website here.