New Zealand kiwifruit marketer Zespri vowed to change its business practices in South Korea after it was fined for monopolistic behavior in 2011, but a Chilean industry representative alleges the group has since "regressed" in matters of fair competition in many Asian and European markets.

Speaking with www.freshfruitportal.com, Chilean Kiwifruit Committee president Carlos Cruzat said not only was Zespri acting very aggressively in foreign markets, but had deviated from its spirit of a conservative, grower-owned company.

"Chile feels uncomfortable with the way in which New Zealand takes on the competition in markets, and this is negative for free trade and cooperation," he said.

"They have a very strong position in Asia, where it's very aggressive and increasingly cautious. In Europe it's more aggressive at the supermarket chain level, focusing on some chains, and wherever Chile starts having a firmer position coincidentally there is a very aggressive action coming from Zespri.

"What I'd share about Zespri is that while it's a company with many virtues, prudence is not one of them."

Cruzat said strict policies on free trade and competition meant similar behavior was not seen in the U.S., while he had not seen the trend in Latin America either.

At www.freshfruitportal.com, we were at the forefront of covering Zespri's actions in South Korea before the marketer was fined for securing exclusive contracts with E-Mart and Lotte Mart that cut Chilean fruit out of the market. At the moment, Cruzat and his compatriots are working with authorities in different countries for similar cases, but the executive does not wish to reveal exactly where just yet.

While acknowledging it was not a matter on which members of the Chilean industry could have an opinion, his reading of Zespri's recent buyer visit controversy was that it showed the firm was "distancing" itself from its status of a state-backed marketer representing the interests of New Zealand growers.

"A private company has policies for its ties with clients, and perhaps the amount [of spending] involved isn't so significant in a company that has one owner or a small group of shareholders, but what Zespri represents is the spirit of New Zealand growers, channeling their product for trade," he said.

"I think the complaint there is that the conservative spirit or tradition of New Zealand growers has in some way been violated...they distance themselves from who are the owners of the company - the growers; it reflects more the commercial hunger of the board that directs Zespri.

"Any grower that gets a good return will be happy with it, so here the problem is not necessarily with the amounts but the way the company carries out its style. It's effectively the same as what happens in markets, that the company distances itself from the traditional way of good competition, healthy competition."

In response to Cruzat's claims, Zespri chief operating officer Simon Limmer issued a statement.

"From our perspective, we have a good relationship with Chilean growers and the Chilean Kiwifruit Committee," Limmer said.

"We meet regularly to discuss both the kiwifruit industry and how to develop the category, as well as collaborating proactively on Psa research.

"However we both acknowledge we work in a competitive environment and we’re defined by that market reality."

Chilean kiwifruit production outlook

During a seminar held last month, Cruzat said Chile would have about 20% fewer green Hayward kiwifruit than a normal year, reaching around 160,000 metric tons (MT). The leader attributed the lower production to frosts in both 2013 and 2014, and lower flowering which affects fruit size.

In terms of other varieties, Cruzat estimated production would be around 8,000MT, in a season where parameters were set for minimum brix levels of 5.5 and dry matter of 15.5% at harvest.

Speaking with www.freshfruitportal.com, Cruzat said around 4,000-5,000MT of the 'other varieties' would be gold kiwifruit, which have proven more susceptible to the disease Psa.

"The gold kiwifruit that have been in the VII (Maule) region have been more affected, and there are orchards that are losing production, and there are orchards that have been taken out.

"Today we don’t have a tolerant [gold] variety in Chile...we continue to work on new varieties and are also doing a project with the Universidad de Chile and Udine University, testing new materials.

"There are certain geographical zones where we don’t think the influence will be so significant, and once the growers learn to manage gold kiwifruit better we’ll probably have some of them with good results."

He said that with 160 orchards infected, around 15% of Chile's kiwifruit-growing surface area has been affected by Psa.

"Although Psa will travel freely in the whole country wherever it enters, because it has the capacity to pass through all the controls and all the human actions we can make, the way it arrives determines whether it’s a disaster for the industry or a  disease that's under control.

"We believe that in Chile we’ve had the fortunate of having good coordination with the government, and for the growers in general it has not been a catastrophe that means a permanent cost in the orchards that we have."

Russian ban to shape global kiwifruit trade dynamics

Aside from the increase in New Zealand kiwifruit this year, and a greater amount of Chilean fruit at least compared to 2014, Cruzat said the Russian ban on EU food imports would have flow-on effects to Chile's 2015 campaign.

"The Russian embargo meant that the Greek kiwifruit, which were usually sold in great proportion in Russia, quickly started to be sold in Europe, which meant the start of the European kiwifruit season was very tough," he said.

"It is expected there will be an abundant stock of kiwifruit until May; this puts pressure on so that the arrival of Chilean kiwifruit should be as late as possible to not touch the Italian kiwifruit that's been in storage.

"On the other hand, within Russia the financial situation of many Russians is not very good, and the exchange rates in Russia and Europe have devaluated, so they don’t have a lot of purchasing power for Chilean kiwifruit."

He said these dynamics would have varying effects over the course of the season, which could roughly be divided into three parts.

"The last period is for the long-storage fruit which is generally for Latin America and some countries away from the direct impact of the European situation. Normally we can arrive late in the season in Russia when European fruit hasn't arrived yet - normally the first European fruit is sold in Europe.

"I think this year the later fruit will be as per normal. For the mid-season fruit it’ll be more interesting as we’ll be able to do a good campaign because the accumulation of European fruit will have cleared.

"The early fruit will effectively be more complex because there’ll be Italian stock still going around in Europe and the United States. Chile will probably in the first stage try to prioritize the United States, Latin America and China, leaving space so that Europe clears. This predilection for certain markets could generate oversupply and the markets could be slow."

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