OECD Calls For Removal Of Zespri’s Monopoly

11 May 2011

OECD Calls For Removal Of Zespri’s Monopoly

In its latest report on New Zealand the OECD has called for the removal of private company Zespri’s monopoly on the country’s kiwifruit exports.

The report, OECD Economic Surveys: New Zealand 2011, states that with large New Zealand companies dependent on exports, regulations need to ‘emphasise the minimization of barriers to international trade and investment’ and finds that Zespri’s monopoly is one of the barriers that must go.

The OECD is particularly critical of the country’s product market regulation and said that New Zealand’s trade performance has been ‘decidedly mediocre’ and the Government’s approach to competition ‘lacks consistency’.

The OECD found that although many aspects of the regulatory framework are conducive to competition, barriers exist across a range of other areas including kiwifruit exporting. The report states that:

“While most other OECD countries have been focusing reform efforts on problem areas and thereby improving the coherence of their regulatory frameworks with respect to encouraging competition, policy inconsistency has been escalating in New Zealand.”

Jeff Wesley, Managing Director of New Zealand’s largest horticultural investor and exporter, says the report echoes the concerns about the serious negative consequences of the Government allowing a private company, Zespri to hold a monopoly over New Zealand’s kiwifruit industry, which Turners & Growers has been highlighting. “If we are serious about boosting exports, we need innovative new varieties from innovative new players.”

The OECD’s call for Zespri’s anticompetitive monopoly to be lifted to boost trade and investment backs the finding of the Government’s own 2025 Taskforce, which also stated that Zespri’s ‘monopoly powers’ should be revoked, and rejected the Government’s claim that the monopoly should stay if a majority of growers back it saying: ”It is not clear what public policy interest would justify a Zespri monopoly that prevented, say, 35% of growers who wished to do so from selling their fruit abroad through other companies. The vines and fruit are private property.”

ENDS

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