The Zespri Monopoly

The Herald editorial:

Zespri is the country’s last remaining produce export monopoly. The kiwifruit industry has operated a single-desk system since 1987, first under the Kiwifruit Marketing Board and for the past decade through Zespri. Those 10 years have been an undoubted success story, with impressive increases in volume and export value. Not profitable enough, however, according to Turners & Growers, which says it is time to allow competition “to release the potential of the kiwifruit industry”. …

Significantly, however, Fonterra does not have the status of a monopoly. It has to withstand competition that would increase if dairy farmers lost faith in its management or corporate strategy. Zespri should be no different. It is fundamentally wrong to prevent the likes of Turners & Growers striking out on their own in export markets if they are disenchanted with the present selling arrangements. Any grower that believes Zespri is inefficient or too cumbersome to react quickly to changing market conditions should be able to try to do better.

The Government surely recognises this. It also knows the history of producer boards, why they were deregulated, and that Zespri is the last of the line. Yet it seems content to take the course of least resistance. Agriculture Minister David Carter says the stripping of Zespri’s monopoly status is not on the Government’s agenda. It would be guided by what most growers wanted.

Mr Carter knows the answer to that, but that answer smacks of self-interest, not principle. Additionally, protectionism like this sits oddly with New Zealand’s championing of free trade. Turners & Growers and other growers confident of the quality and pricing of their produce should have the right to compete in export markets. If Zespri is on top of its game, it will be equal to this.

I have to say I agree with the editorial. Just because 80% of growers want a monopoly, is not sufficient reason to stop the other 20% from following their own path.