The decision comes after collaborative marketing applications from Seeka Kiwifruit Industries and Splice Fruit were rejected amid concerns they would upset Zespri premiums in China and Austria. 

In an expedited hearing this week, the New Zealand High Court in Auckland issued an order to the country's Kiwifruit Board to reconsider collaborative marketing proposals to the tune of 700,000 trays.

New Zealand's Kiwifruit Export Regulations 1999 include Zespri as the sole desk marketer for the fruit, but parties wishing to export to countries other than Australia can apply to the board for approval of a collaborative arrangement with the company.

The court hearing came about in response to three rejections in December of collaborative marketing proposals put forth by  Splice Fruit and Seeka Kiwifruit Industries, which were intended for export during the 2016 season.

Splice had applied for an arrangement to export 180,000 trays of green organic Class 1 kiwifruit to Austria, while Seeka had sought approval to ship 400,000 trays of green Class 1 kiwifruit to Hainan Island, China and 120,000 trays of green Class 1 kiwifruit to Xinjiang Province, China.

The board's China Committee had expressed concerns about a "leakage" of product from Hainan to the mainland China market and the disruption it could cause to Zespri's strategy.

"Having regard to those factors, and Seeka’s request for the programme to operate outside standard drawdown provisions, the committee considered that the overall wealth of suppliers would not be increased by approval of the application," Justice Heath said as background in the ruling.

"So far as Seeka’s application in respect of Xinjiang province was concerned, the expertise of the members of the China Committee takes on greater significance. Not only were they concerned with an analysis of the economic issues but also considered problems involved in getting the kiwifruit to the relevant destination port, Urumqi, and the likelihood of “leakage” if the proposal were to go ahead.

"The committee was also of opinion that there was a risk that overall wealth of suppliers could be adversely affected by the proposal given Zespri’s current market strategy; in particular the China Committee was concerned about the possibility of a parallel supply of New Zealand kiwifruit developing in a manner detrimental to the goals of increasing sales and maximising returns in China."

In terms of Splice's application, Europe Committee analyzed the information it had and was "conscious of the potential for the proposal to impact adversely on the “ZESPRI” brand and premium returns to New Zealand suppliers that could be received through it.

"The use of a house brand under the name of “Ja! Naturlich” told against Splice on that point," Justice Heath said.

Seeka CEO Michael Franks raised concerns about conflict of interest on the Kiwifruit New Zealand board, highlighting the China-focused applications were heard by two industry representatives whose companies were in direct competition with Seeka.

An independent study by Waikato University's Institute for Business Research recently concluded there has been limited uptake of collaborative marketing opportunities to date, and that it could be "more central to industry operations going forward".

The study's findings were included in a discussion paper released by the Ministry of Primary Industries (MPI) in February.

Zespri is currently under investigation from New Zealand's Serious Fraud Office (SFO) with local media tallying total legal costs to date in the realm of NZ$6.3 million (US$4.38 million).

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