Zespri urges kiwifruit growers against PSA class action

The country's kiwifruit marketing body, Zespri International, is urging growers not to join the proposed class action against the Ministry of Primary Industries, seeking $885 million compensation for the outbreak of the vine-killing Psa disease in 2010, fearing it will fail and risks poisoning the industry's relationship with the government.

"Our industry structure is a privilege granted to us by government and creates huge value to New Zealand kiwifruit growers. This action will compromise the industry's relationship with government," said Zespri chairman Peter McBride at a media conference this afternoon in Tauranga saying: "I do not support or agree with the approach taken by the group behind 'The Kiwifruit Claim'."

The group announced the class action three days ago, claiming it had more than 10 percent of the industry's growers on board for the claim, which is supported by the professional litigation fund firm, LPF Group, which helps bankroll class actions on a success fee basis.

"I am extremely concerned that 'The Kiwifruit Claim' lacks transparency and fails to properly communicate the uncertainties surrounding the claim," said McBride in a statement. "Zespri completely rejects this approach, and believes that the profit which would be made by the litigation funder if the claim is successful reflects the high risk of the claim failing."

Despite being an industry powerhouse through its statutory monopoly export rights for New Zealand kiwifruit to all foreign markets bar Australia, it appears Zespri was not consulted on the claim.

"This campaign has been launched through the media with no consultation with the industry," said McBride.

While the Psa outbreak had devastated orchards and livelihoods, the industry was "well into the recovery" and "firmly on a growth path," McBride said. "Orchard gate returns are strong and orchard land prices have not only recovered from the effects of Psa but are now higher than pre-Psa levels.

"The last thing this industry needs right now is for the focus to be taken from growing our industry, and placed on a divisive, drawn out, and hugely expensive legal battle, especially given the poor process followed by 'The Kiwifruit Claim' and the uncertain legal basis of the case," said McBride. "The industry will prosper by working with the government, not against it. The industry is working collaboratively on a number of initiatives, such as the Government Industry Agreements, Research and Development, market access, free trade agreements, and Kiwifruit Vine Health, to protect and grow our industry."

(BusinessDesk)