Levels of fear and intimidation in the kiwifruit industry are such that growers giving evidence to any enquiry into the industry should be able to do so in confidence, says Marcus Wilkins of Independent Kiwifruit Growers Association.

His comments follow the calls by IKGA for an independent enquiry into Zespri and the New Zealand kiwifruit industry – in light of the Serious Fraud Office investigation into Zespri and the conviction and fine in a Shanghai court earlier this year, of its subsidiary, Zespri Management Consulting Company, and one of its employees convicted of charges of evading customs duties in China.

Zespri has responded to some of IKGA's claims - view here.

'Given the seriousness of the issues involved IKGA believes that a Select Committee enquiry at which people could give evidence [including evidence in confidence] is a minimum,” says Marcus.

'Levels of fear and intimidation in the kiwifruit industry are such that Parliamentarians need to hear first-hand, in confidence if necessary, of some of the nonsense that goes on. The Select Committee enquiry process allows that to occur and would enable those who would like to talk openly, the confidence to do so without fear of recrimination or ‘naming and shaming' tactics.”

New Zealand Kiwifruit Growers Inc president Neil Trebilco says he is surprised and shocked at claims that growers feel intimidated.

'Open debate is encouraged at all grower meetings,” says Neil.

'The views of members of IKGA may not be shared by the majority of growers, but they are treated with courtesy and respect; and members [are] given the opportunity to express their views. IKGA members are welcome to attend NZKGI forum meetings, as are all growers.

'Marcus has attended our meetings and been able to express his views; and an invitation has been extended to IKGA grower liaison member Ted Meads to attend the next forum meeting,” says Neil.

'It seems Marcus wants the industry to align itself with IKGA views, which are not the views of the majority."

Marcus says IKGA is an incorporated society established in May 2010 by a group of concerned kiwifruit growers to provide an independent voice for growers because 'it has no confidence in the ability of Kiwifruit New Zealand or NZKGI to act as effective watchdogs on the activities of Zespri”.

'Because IKGA meetings have been infiltrated in the past by Zespri Zombies and because of their dirty tactics of playing the man not the ball (ie debating the issues in the open) we do not disclose details of members. We do not hold details of member shareholdings but the majority of members have shares in Zespri. Look at it another way – IKGA represents the 75 per cent of growers who own 25 per cent of the shares in Zespri. IKGA is not seeking the removal of the SPE (Zespri's single point of entry marketing status) – it wants the SPE to work better for growers,” says Marcus.

Marcus says the terms of reference for an industry enquiry need to be wide ranging. 'Essentially we see the need for a complete review of the industry structure with particular emphasis on the role and governance of Zespri, Kiwifruit Vine Health, Kiwifruit New Zealand and New Zealand Kiwifruit Growers Inc.

'This would necessarily entail a review of the regulations to determine whether or not they are working to do what they are supposed to do, in terms of mitigating the effects of the 'monopsony” (one buyer in the on-shore market) and what the impact is for NZ Inc (the brand), in terms of international law and the ability of New Zealand to have a credible voice in trade negotiations, particularly with regard to questions of trade distorting subsidies and Intellectual Property Rights.

'The question of the appropriate ownership of public good funded kiwifruit varieties and the Zespri brand would need to be canvassed as part of any such review given the disparity between shareholders and growers.”

In a statement regarding its call for an enquiry IKGA says it believes that a wide ranging independent enquiry into not just Zespri but the operation of the Kiwifruit Export Regulations, and the kiwifruit industry generally, is essential for a raft of reasons including what it calls governance shortcomings at Zespri and that less than a quarter (25 per cent) of kiwifruit growers own three quarters (75 per cent) of Zespri.

IKGA also says public good funded kiwifruit varieties have been privatised and that Kiwifruit Vine Health refuses to be subject to probity auditing.

'There is no effective regulatory supervision of Zespri and the (kiwifruit) regulations breach World Trade rules and infringe intellectual property rights and deny New Zealand growers access to non-Zespri kiwifruit varieties,” the IKGA statement says.

Marcus says the Government would pay for the enquiry IKGA wants. 'This is all part of the democratic process and necessary to allow the legislature and individuals affected by the actions of the Executive (regulations are executive actions unlike legislation which is subject to parliamentary scrutiny), to have their concerns heard without recourse to the courts which have a limited ability to review the decisions of the Executive.

'The Government should pay for the enquiry because it is the complete failure to review the operation of the regulations in their 13-year existence that has allowed this situation to arise. Had regulatory responsibility principles been applied to these regulations, as they are to other regulations, the industry would arguably not be in this mess.”