Required Report - public distribution

**Date:** 12/22/2005

**GAIN Report Number:** NZ6001

NZ6001

**New Zealand**

**Fresh Deciduous Fruit**

**Annual**

**2006**

**Approved by:**

![](media/image1.wmf)David Rosenbloom

U.S. Embassy

**Prepared by:**

Alastair Patterson

**Report Highlights:**

New Zealand's apple harvest for 2006 is forecast to decline 3 percent to
488,000 tons. This will reduce apple exports by 6 percent to 300,000
tons. Pear production in 2006 is forecast to increase 55 percent to
10,600 tons, increasing exports 27 percent to 6,500 tons. Pipfruit New
Zealand is scheduled to introduce an 'export market panel' that will
administer a new voluntary quality standard. Biosecurity Australia
issued a draft import risk analysis report for the importation of New
Zealand apples into Australia. The New Zealand apple industry has
reacted negatively to the report, arguing that the IRA is inconsistent
with WTO findings in a similar case between the United States and Japan.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Wellington \[NZ1\]

\[NZ\]

SECTION I. SITUATION AND OUTLOOK

New Zealand's apple harvest for 2006[^1] is forecast to decline 3
percent to 488,000 tons. This will reduce apple exports by 6 percent to
300,000 tons. The decline in production is primarily the result of the
large number of tree removals following two disastrous years for the
industry. Average production per tree is forecast to increase slightly.
Pear production in 2006 is forecast to increase 56 percent to 10,600
tons due to the biennial nature of pear production. Pear exports will
increase 27 percent to 6,500 tons. The pear crop will benefit from the
same positive growing conditions as apples. The volume of apples
utilized for processing in 2006 is forecast to increase 2 percent to
132,350 tons. Implementation of a new, voluntary quality mark is likely
to result in a small increase in the percentage of apples not exported
as a result of not meeting new voluntary quality standards.

The poor profitability faced by the industry during the past two seasons
has motivated participants to work together to better coordinate
marketing efforts. Pipfruit New Zealand (PNZ) is scheduled to introduce
an 'export market panel' that will administer a new voluntary quality
standard in January 2006, before fruit harvesting begins. The export
marketing panel's new voluntary quality standard will be identified on
cartons of certified apples as a branded Country of Origin Labeling
(COOL) mark. It is being aimed primarily at pipfruit buyers in overseas
markets. The consumer is not being targeted, as implementing an adequate
promotional campaign would be too costly. The marketing panel is an
important part of the strategy of the surrounding implementation of the
mark. It will provide a regular forum for exporters to meet and discuss
issues that arise. It is hoped that better coordination will greatly
reduce the aggressive competition among New Zealand exporters in
previous years that contributed to poor returns for the industry. PNZ
estimates that 80 percent of New Zealand's apple crop will carry the
mark in 2006, which will sit alongside exporters' own brands.

Biosecurity Australia issued a draft import risk analysis report (IRA)
for the importation of New Zealand apples into Australia on December 1,
2005 (see AS5044 and NZ5013). The New Zealand apple industry has reacted
negatively to the report, arguing that the IRA is inconsistent with WTO
findings in a similar case between the United States and Japan. New
Zealand growers state that the import conditions included in the draft
IRA make it economically unviable to export apples to Australia. The New
Zealand government is currently reviewing the report before making a
submission. It has stated that it has 'serious concerns' about some of
the conditions imposed on New Zealand apples. The final IRA for New
Zealand is expected to serve as a basis for a subsequent IRA for U.S.
apples. New Zealand initiated negotiations with Japanese authorities on
its apple access protocol. This follows Japan opening its borders to
U.S. apples in September 2005, after the WTO ruling that mature fruit is
not a vector for transmitting fireblight.

Horticulture New Zealand (HNZ) officially began operating on December 1,
2005. This follows the election of its board in November 2005. HNZ was
created as an umbrella organization to present a unified voice for New
Zealand's horticulture industry (see NZ5001), representing the interests
of New Zealand's 7,000 commercial fruit, vegetable, berryfruit and olive
growers. HNZ will also act as an information clearinghouse, distributing
relevant information to its stakeholders (product groups and district
associations). Industry participants see the organization's formation as
an opportunity to present a stronger voice to government on issues
common across horticultural industries. Funding will come from a
commodity levy paid by growers based on product value.

SECTION II. STATISTICAL TABLES

PS&D TABLES

+-------------+---------+--------+--------+--------+--------+--------+
| ###         |         |        |        |        |        |        |
| ### **New Z |         |        |        |        |        |        |
| ealand Appl |         |        |        |        |        |        |
| es, Fresh** |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
|             |         |        |        |        | (HA    |        |
|             |         |        |        |        | )(1000 |        |
|             |         |        |        |        | TREE   |        |
|             |         |        |        |        | S)(MT) |        |
+-------------+---------+--------+--------+--------+--------+--------+
|             | 2003    | R      | 2004   | Es     | 2005   | Fo     |
|             |         | evised |        | timate |        | recast |
+-------------+---------+--------+--------+--------+--------+--------+
|             | USDA    | Post   | USDA   | Post   | USDA   | Post   |
|             | O       | Es     | Of     | Es     | Of     | Es     |
|             | fficial | timate | ficial | timate | ficial | timate |
|             | \[Old\] | \      | \      | \      | \      | \      |
|             |         | [New\] | [Old\] | [New\] | [Old\] | [New\] |
+-------------+---------+--------+--------+--------+--------+--------+
| Market Year |         | 1      |        | 1      |        | 1      |
| Begin       |         | 0/2003 |        | 0/2004 |        | 0/2005 |
+-------------+---------+--------+--------+--------+--------+--------+
| Area        | 11000   | 11000  | 11000  | 11000  | 0      | 10500  |
| Planted     |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| Area        | 0       | 0      | 0      | 0      | 0      | 0      |
| Harvested   |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| Bearing     | 0       | 0      | 0      | 0      | 0      | 0      |
| Trees       |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| Non-Bearing | 0       | 0      | 0      | 0      | 0      | 0      |
| Trees       |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| Total Trees | 0       | 0      | 0      | 0      | 0      | 0      |
+-------------+---------+--------+--------+--------+--------+--------+
| Commercial  | 511000  | 511000 | 468000 | 467000 | 0      | 453000 |
| Production  |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| Non-Comm.   | 39000   | 39000  | 36000  | 36000  | 0      | 35000  |
| Production  |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| TOTAL       | 550000  | 550000 | 504000 | 503000 | 0      | 488000 |
| Production  |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| TOTAL       | 360     | 360    | 200    | 350    | 0      | 350    |
| Imports     |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| TOTAL       | 550360  | 550360 | 504200 | 503350 | 0      | 488350 |
| SUPPLY      |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| Domestic    | 56000   | 56000  | 55000  | 55150  | 0      | 56000  |
| Fresh       |         |        |        |        |        |        |
| Consump     |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| Exports,    | 358000  | 358000 | 320000 | 319000 | 0      | 300000 |
| Fresh Only  |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| For         | 136360  | 136360 | 129200 | 129200 | 0      | 132350 |
| Processing  |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| Withdrawal  | 0       | 0      | 0      | 0      | 0      | 0      |
| From Market |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+
| TOTAL       | 550360  | 550360 | 504200 | 503350 | 0      | 488350 |
| UTILIZATION |         |        |        |        |        |        |
+-------------+---------+--------+--------+--------+--------+--------+

  ---------------- ---------- ---------- ---------- ---------- ---------- ----------
  **New Zealand                                                           
  Apple Juice,                                                            
  Concentrated**                                                          

                                                               (MT)       

                   2003       Revised    2004       Estimate   2005       Forecast

                   USDA       Post       USDA       Post       USDA       Post
                   Official   Estimate   Official   Estimate   Official   Estimate
                   \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]    \[New\]

  Market Year                 10/2003               10/2004               10/2005
  Begin                                                                   

  Deliv. To        136360     136360     129200     129200     0          132350
  Processors                                                              

  Beginning Stocks 0          0          0          0          0          0

  Production       17800      23000      16100      22000      0          22500

  Imports          5000       6000       6000       6400       0          6200

  TOTAL SUPPLY     22800      29000      22100      28400      0          28700

  Exports          10600      11300      11000      12000      0          12100

  Domestic         12200      17700      11100      16400      0          16600
  Consumption                                                             

  Ending Stocks    0          0          0          0          0          0

  TOTAL            22800      29000      22100      28400      0          28700
  DISTRIBUTION                                                            
  ---------------- ---------- ---------- ---------- ---------- ---------- ----------

  ------------------ ---------- ---------- ---------- ---------- ------------ ----------
  **New Zealand                                                               
  Pears, Fresh**                                                              

                                                                 (HA)(1000    
                                                                 TREES)(MT)   

                     2003       Revised    2004       Estimate   2005         Forecast

                     USDA       Post       USDA       Post       USDA         Post
                     Official   Estimate   Official   Estimate   Official     Estimate
                     \[Old\]    \[New\]    \[Old\]    \[New\]    \[Old\]      \[New\]

  Market Year Begin             10/2003               10/2004                 10/2005

  Area Planted       1000       1000       1000       1000       0            1000

  Area Harvested     0          0          0          0          0            0

  Bearing Trees      0          0          0          0          0            0

  Non-Bearing Trees  0          0          0          0          0            0

  Total Trees        0          0          0          0          0            0

  Commercial         10400      9700       6500       6300       0            9500
  Production                                                                  

  Non-Comm.          1350       1350       500        500        0            1100
  Production                                                                  

  TOTAL Production   11750      11050      7000       6800       0            10600

  TOTAL Imports      3000       3700       4500       3400       0            3000

  TOTAL SUPPLY       14750      14750      11500      10200      0            13600

  Domestic Fresh     4450       4450       3200       2100       0            3100
  Consump                                                                     

  Exports, Fresh     6300       6300       5300       5100       0            6500
  Only                                                                        

  For Processing     4000       4000       3000       3000       0            4000

  Withdrawal From    0          0          0          0          0            0
  Market                                                                      

  TOTAL UTILIZATION  14750      14750      11500      10200      0            13600
  ------------------ ---------- ---------- ---------- ---------- ------------ ----------

TRADE MATRICES

+-----------------------+-------+--------+--------+--------+---------+
| ####### New Zealan    |       |        |        |        |         |
| d Fresh Apple Exports |       |        |        |        |         |
+-----------------------+-------+--------+--------+--------+---------+
|                       |       |        |        | (MT)   |         |
+-----------------------+-------+--------+--------+--------+---------+
| Partner Country       | Janu  |        |        | Oct    |         |
|                       | ary - |        |        | ober - |         |
|                       | Dec   |        |        | Sep    |         |
|                       | ember |        |        | tember |         |
+-----------------------+-------+--------+--------+--------+---------+
|                       | 2002  | 2003   | 2004   | 2004   | 2005    |
+-----------------------+-------+--------+--------+--------+---------+
| Other EU              | 84119 | 77805  | 92008  | 92008  | 57690   |
+-----------------------+-------+--------+--------+--------+---------+
| United Kingdom        | 72728 | 73591  | 78453  | 78453  | 66059   |
+-----------------------+-------+--------+--------+--------+---------+
| United States         | 58348 | 49158  | 56376  | 56376  | 32455   |
+-----------------------+-------+--------+--------+--------+---------+
| Netherlands           | 19578 | 27457  | 48429  | 48429  | 66031   |
+-----------------------+-------+--------+--------+--------+---------+
| Taiwan                | 13818 | 14557  | 19279  | 19279  | 25762   |
+-----------------------+-------+--------+--------+--------+---------+
| Germany               | 14685 | 20798  | 14491  | 14491  | 21179   |
+-----------------------+-------+--------+--------+--------+---------+
| Hong Kong             | 7658  | 11121  | 6807   | 6806   | 4769    |
+-----------------------+-------+--------+--------+--------+---------+
| Malaysia              | 10563 | 8315   | 6034   | 6034   | 3625    |
+-----------------------+-------+--------+--------+--------+---------+
| Singapore             | 9188  | 7821   | 5230   | 5252   | 3637    |
+-----------------------+-------+--------+--------+--------+---------+
| France                | 2305  | 2766   | 4752   | 4752   | 7681    |
+-----------------------+-------+--------+--------+--------+---------+
| Canada                | 1824  | 3916   | 3961   | 3961   | 4135    |
+-----------------------+-------+--------+--------+--------+---------+
| Other                 | 24046 | 25453  | 22507  | 22221  | 25832   |
+-----------------------+-------+--------+--------+--------+---------+
| Total                 | 3     | 322758 | 358327 | 358062 | 318855  |
|                       | 18860 |        |        |        |         |
+-----------------------+-------+--------+--------+--------+---------+

+-----------------------+--------+-------+-------+---------+---------+
| ####### New Zeala     |        |       |       |         |         |
| nd Fresh Pear Exports |        |       |       |         |         |
+-----------------------+--------+-------+-------+---------+---------+
|                       |        |       |       | (MT)    |         |
+-----------------------+--------+-------+-------+---------+---------+
| Partner Country       | Jan    |       |       | Oc      |         |
|                       | uary - |       |       | tober - |         |
|                       | De     |       |       | Se      |         |
|                       | cember |       |       | ptember |         |
+-----------------------+--------+-------+-------+---------+---------+
|                       | 2002   | 2003  | 2004  | 2004    | 2005    |
+-----------------------+--------+-------+-------+---------+---------+
| United States         | 4473   | 1486  | 3151  | 3151    | 2981    |
+-----------------------+--------+-------+-------+---------+---------+
| United Kingdom        | 2183   | 478   | 1647  | 1647    | 1055    |
+-----------------------+--------+-------+-------+---------+---------+
| Destination Unknown   | 1204   | 173   | 680   | 680     | 430     |
| EU                    |        |       |       |         |         |
+-----------------------+--------+-------+-------+---------+---------+
| Netherlands           | 857    | 28    | 283   | 283     | 202     |
+-----------------------+--------+-------+-------+---------+---------+
| Singapore             | 100    | 51    | 126   | 126     | 97      |
+-----------------------+--------+-------+-------+---------+---------+
| France                | 73     | 48    | 118   | 118     | 38      |
+-----------------------+--------+-------+-------+---------+---------+
| Other                 | 332    | 191   | 328   | 292     | 329     |
+-----------------------+--------+-------+-------+---------+---------+
| World                 | 9222   | 2455  | 6333  | 6297    | 5132    |
+-----------------------+--------+-------+-------+---------+---------+

SECTION III. PRODUCTION, TRADE AND POLICY

Production

New Zealand's apple harvest for 2006[^2] is forecast to decline 3
percent to 488,000 tons. This will reduce apple exports by 6 percent to
300,000 tons. The decline in production is primarily the result of the
large number of tree removals following two disastrous years for the
industry. Estimates put tree removals at between 5 and 10 percent of New
Zealand's apple trees. Production per tree is forecast to increase
slightly due to several factors. The majority of trees removed are older
and lower performing, increasing the average productivity per tree
across the harvested area. The apple bloom this season has been good and
the Braeburn crop is expected to increase production in 2006 due to its
biennial cycle. These gains will be offset slightly as growers have
aggressively thinned some varieties, including Royal Gala, to save on
pruning costs later in the season and increase apple size to appeal to
markets. A good natural 'apple drop' helped lower thinning costs.
Exports may be reduced due to a new, voluntary Country of Origin
Labeling (COOL) mark that requires apples to meet a minimum quality
standard before export (see below). A warm, wet spring has meant that
growers have had to implement spray programs to control black spot on
fruit.

Returns to New Zealand's apple industry during the last two seasons have
been very poor. In many instances, returns have been lower than the cost
of production. This poor profitability is forecast to continue in 2006
due to several ongoing factors. New Zealand's dollar remains strong,
reducing returns to growers. Shipping and marketing of exports are
uncoordinated as a result of the large number of exporters and
fragmented nature of the industry. Competition from other countries has
increased and New Zealand's seasonal advantage is being lost due to
increasing southern hemisphere supply, improved storage technology (for
example, Northern hemisphere competitors using SmartFresh^TM^) and
competition from other types of fruit. This is causing many growers to
leave the industry, generally converting the land to other uses such as
cropping or subdividing for housing.

In 2005 New Zealand's apple harvest declined 8.5 percent to 503,000
tons. Exports declined 11 percent to 319,000 tons. This is consistent
with post's earlier estimates (see NZ5013). Returns to the industry were
even lower than in 2004, with many exporters finding it difficult to
sell the remnants of New Zealand's Braeburn crop. Many growers owe
packers money, as returns from fruit failed to cover the cost of packing
and packaging. This is mainly due to the very poor prices paid for
apples in the European market, which took 70 percent of New Zealand's
apple exports. Returns from the U.S. and Asian markets were good in
comparison. A large number of exporters diverted product to the European
market in 2005, following forecasts at the beginning of the season that
prices would be poor in the U.S. market.

The volume of apples utilized for processing in 2006 is forecast to
increase 2 percent to 132,350 tons. Implementation of the voluntary COOL
mark is likely to result in a small increase in percentage of apples not
exported as a result of not meeting the new voluntary quality standards.

Pear production in 2006 is forecast to increase 55 percent to 10,600
tons due to the biennial nature of pear production. Pear exports will
increase 27 percent to 6,500 tons. The pear crop will benefit from the
same positive growing conditions as apples. Like apples, pears are at
increased risk of black spot on fruit this season due to the warm, wet
spring in 2005. Pears are a niche product and haven't suffered the same
poor returns as the apple industry. Some industry analysts believe that
this will motivate growers to increase pear production in future, as
they forecast returns on apples to continue to remain low. In 2005 New
Zealand's pear harvest declined 38 percent to 6,800 tons. Exports
declined 19 percent to 5,100 tons. This is slightly lower than Post's
earlier estimate (see NZ5013).

Overview of New Zealand's Apple Industry

New Zealand is a relatively small producer of apples, accounting for
only 1 percent of world production. More than 60 percent of the crop is
exported on average, however, making New Zealand one of the top 10
exporters in the world. Approximately 5 percent of world apple trade
volume consists of New Zealand fruit. The main apple varieties exported
are Braeburn and Royal Gala, which represented 38 percent and 37 percent
respectively of exports during 2005. These two varieties are becoming
international commodities as their production increases in major apple
producing countries. This is motivating many growers to assess
proprietary breeds such as Jazz when planting new trees. Approximately
90 percent of New Zealand's apple harvest is grown in the Hawkes Bay (50
percent) and Nelson (40 percent) regions. The apple harvest begins in
the second week of February in Hawkes Bay (slightly later in Nelson) and
usually is completed by early May.

New Zealand pear production and exports are on a far smaller scale than
apples. The higher carton prices that growers typically receive for
pears are offset by higher production costs. With lower net returns to
growers, pears have in the past been considered less appealing than
apples. This view is changing as a result of poor returns to apple
growers, while pears maintain profitability in niche markets. Most pears
are grown in apple orchards, making it difficult to get an exact count
on the number of hectares planted in pears. Pears are harvested from the
beginning of February until the end of April. Pear trees produce in
two-year cycles (biennial), with every second year producing
approximately twice as much as the alternate years.

TRADE

Fire blight and Australian Market Access

Biosecurity Australia issued a draft import risk analysis report (IRA)
for the importation of New Zealand apples into Australia on December 1,
2005 (see AS5044 and NZ5013). The comment period for the draft IRA
closes on March 30, 2006. The New Zealand apple industry has reacted
negatively to the report, arguing that the proposed stringent quarantine
risk management procedures are inconsistent with WTO findings in a
similar case between the United States and Japan. New Zealand industry
participants view these measures as protectionism, following the
findings by the WTO that mature apples are not a vector for fireblight.
They state that the import conditions included in the draft IRA do not
make it economically viable to export apples to Australia. The New
Zealand government is currently reviewing the report before making a
submission. It has stated that it has some 'serious concerns' about some
of the conditions imposed on New Zealand apples. The final IRA for New
Zealand is expected to serve as a basis for a subsequent IRA for U.S.
apples.

New Zealand has begun negotiations with Japanese authorities on its
apple access protocol (see NZ5013). This follows Japan opening its
borders to U.S. apples in September 2005, after the WTO ruling that
mature fruit does not transmit fireblight. Industry participants see a
lot of potential in the Japanese market, despite it being viewed as
challenging.

POLICY

Voluntary Quality Mark

The poor profitability faced by the industry during the past two seasons
has motivated participants to work together to better coordinate
marketing efforts. Pipfruit New Zealand (PNZ) is scheduled to introduce
an 'export market panel' that will administer a new voluntary quality
standard late January 2006, before fruit harvesting begins (see NZ5013).
This is in response to concerns within the industry and international
markets that fruit quality had deteriorated following deregulation of
New Zealand's apple industry. New Zealand exporters often compete
aggressively against each other on price in export markets. The
fragmented nature of the industry has made it difficult to coordinate
among exporters to avoid this situation. ENZA, formerly the single desk
marketer of New Zealand apples and now a private company, states that of
the more than 90 apple exporters, only ENZA and a very small number of
others have structured marketing programs. A large number of exporters
are shipping apples without a committed buyer, forcing prices down as
they compete to sell their product before it deteriorates. In addition,
many exporters are shipping apples that are below required quality
standards, negatively impacting the image of high quality, New Zealand
apples. ENZA is attempting to attract growers back to the company. Its
share of exports has fallen from 70 percent before deregulation in 2000
(the remainder was sold by other exporters under permit) to 31 percent
in 2005.

The export marketing panel's new voluntary quality standard will be
identified on cartons of certified apples as a branded Country of Origin
Labeling (COOL) mark. The standards are unable to be made compulsory as
New Zealand's apple industry is deregulated. The focus of the mark's
guidelines will emphasize post harvest operators more than growers. Only
exporters that join the marketing panel that manages the mark will be
eligible to use it on their packaging. Their apples must conform to this
quality standard in order to carry the mark. The mark is designed to
represent quality, traceability and the positive image associated with
New Zealand. It is being aimed primarily at pipfruit buyers in overseas
markets. The consumer is not being targeted, as implementing an adequate
promotional campaign would be too costly. Marks will only be printed on
cartons of apples, as stickers for individual fruit are considered too
expensive.

The marketing panel is an important part of the strategy of the
surrounding implementation of the mark. It will provide a regular forum
for exporters to meet and discuss issues that arise. It is hoped that
better coordination will greatly reduce the aggressive competition among
New Zealand exporters in previous years that contributed to poor returns
to the industry. PNZ estimates that 80 percent of New Zealand's apple
crop will carry the mark in 2006, which will sit alongside exporters'
own brands.

Horticulture New Zealand

Horticulture New Zealand (HNZ) officially began operating on December 1,
2005. This follows the election of its board in November 2005. HNZ has
been created as an umbrella organization to present a unified voice for
New Zealand's horticulture industry (see NZ5001), representing the
interest of New Zealand's 7,000 commercial fruit, vegetable, berryfruit
and olive growers. HNZ brings together the New Zealand Fruitgrowers
Federation, the New Zealand Potato and Vegetable Growers Federation and
the New Zealand Berryfruit Growers Federation. Olives New Zealand
officially joined HNZ following its creation. HNZ will perform the role
of these organizations, with a focus on promoting the horticulture
sector and its common views to the public, media, policy makers and
Members of Parliament. Although these three organizations will continue
to function in the background, most of their functions will be
contracted out to HNZ. They will be responsible for product specific
issues such as research and development and quality assurance programs.
HNZ will also act as an information clearinghouse, distributing relevant
information to its stakeholders (product groups and district
associations). Industry participants see the organization's formation as
an opportunity to present a stronger voice to government on issues
common across horticultural industries.

Funding will come from a commodity levy paid by growers based on product
value. The levy will be managed by HNZ, with the exception of product
groups or federations of product groups who wish to incorporate HNZ
funding into their own product levy or other income. Candidates for the
board are nominated by product groups and voted on by all growers.
Individual product groups will continue to deal with product specific
issues including research, product promotion and industry planning.
Memorandums of understanding will be created between HNZ and product
groups to minimize duplication of effort and possible organization
clashes. Apple industry participants view Pipfruit New Zealand (PNZ) and
HNZ as complimentary organizations.

[^1]:

[^2]: Year ending October, 2006