Turners & Growers Case Against Zespri

Thursday 6 May, 2010
News Release
 
Update: Turners & Growers Case Against Zespri
 
In July 2009, Turners & Growers Limited and its wholly owned subsidiaries, Turners and Growers Horticulture Limited and ENZA Limited filed proceedings in the Auckland High Court against Zespri Group Limited and its subsidiary Zespri International Limited.
 
The proceedings are in respect of claims by Turners & Growers that:
 
1. Regulations 3 and 4 of the Kiwifruit Export Regulations 1999, which purport to give Zespri a monopoly over the export of kiwifruit (other than to Australia), are unlawful and of no effect because they are not permitted by s. 26 of the Kiwifruit Industry Restructuring Act 1999, read in light of the Commerce Act 1986 and the NZ Bill of Rights Act 1990;
 
2. Zespri has abused its dominant position for the purpose of preserving its monopoly after deregulation, by:
 
a. seeking to tie growers, suppliers and post harvest operators into exclusivity contracts;
 
b. attempting to take control of the supply of kiwifruit for export to Australia in the 2008/2009 season; and
 
c. attempting to take control of new kiwifruit cultivars.
 
3. Zespri has unlawfully discriminated among suppliers of kiwifruit by paying more for kiwifruit supplied by growers who are prepared to sign exclusivity agreements with Zespri, in an improper attempt to preserve Zespri’s monopoly power, in breach of regulation 9 of the Kiwifruit Export Regulations 1999.
 
4. Zespri has unlawfully carried on non-core businesses and activities without obtaining the approval of shareholders and suppliers, in breach of regulation 11 of the Kiwifruit Export Regulations 1999.
 
In a decision issued yesterday, 5 May 2010, the High Court has ruled that it will hold an initial hearing from 20 to 23 July 2010 to determine the issues of: (a) whether the Kiwifruit Export regulations purportedly giving Zespri a monopoly are unlawful; and (b) whether the High Court has jurisdiction to determine whether Zespri has been acting in breach of regulations 9 (non-discrimination) and 11 (non-diversification) of the Kiwifruit Export Regulations 1999. 
 
The remaining issues will be heard in a further trial, to be fixed for early 2011.
 
"We are pleased that Justice White has recognised the importance of having all of Turners & Growers’ claims heard as soon as is practicable, and that the first part of the hearing will soon be underway" said Turners & Growers Managing Director, Jeff Wesley.
 
A copy of the decision is attached and available at www.turnersandgrowers.com
 
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