G/STR/Q1/NZL/21  
 
24 October 2018 
(18-6686) Page: 1/2 
Working Party on State Trading Enterprises  Original: English  
 
 
STATE TRADING  
REPLIES TO QUESTION S1 POSED BY CHILE REGARDING  
THE NEW AND FULL NOT IFICATION OF NEW ZEALAND2 
The following communication, dated 18 October 2018, is being circulated at the request of the 
Delegation of New Zealand . 
 
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Regarding  NZ's latest STEs notification (G/STR/N/17/NZL), we would like to pose the following 
questions regarding Zespri:  
 
Question 1  
 
We note that the Kiwifruit Export Regulations 1999 – that provide for the legal basis for 
the special export authority for Zespri Group Limited – undertook amendments in 2017. 
Would New Zealand please provide information regarding the main changes that the  
regulation underwent?  
 
Reply : 
 
In July 2017 the Government amended the Kiwifruit Export Regulations 1999 (the Regulations) to 
enable Zespri to improve alignment of its share ownership with kiwifruit supply . 
 
Amendments to the Regulations enable Zespri  to improve alignment of share ownership with kiwifruit 
supply, while ensuring ongoing protections of shareholder rights. The amendments, subject to 
shareholder vote, enable Zespri  to cease dividend payments to "dry shareholders"  (i.e. those that 
no longer  supply Zespri with kiwifruit), and set rules about maximum shareholding based on growers 
supply of kiwifruit. Zespri will continue to have access to other commercial measures, such as share 
buyback, to encourage alignment.  
 
The changes confirm that Zespr i's core business includes purchasing New Zealand grown kiwifruit 
for export as well as marketing of New Zealand grown kiwifr uit, market development for 
New Zealand grown kiwifruit, and kiwifruit research and development . 
 
Amendments to the Regulations con firm that Zespri 's core b usiness includes purchasing 
New Zealand grown kiwifruit for export as well as marketing of New Zealand grown kiwifruit, market 
development for New Zealand grown kiwifruit, and kiwifruit research and development. Zespri can 
continue  to engage in other business activities, provided it is low risk to the interests of kiwifruit 
growers, or kiwifruit growers otherwise approve the activity, enhance Kiwifruit New Zealand (KNZ 's) 
independence from the industry and its accountability to the Government.  
 
Amendments to the Regulations improve KNZ 's independence from the industry and its 
accountability to the Government:  
 
                                              
1 G/STR/Q1/NZL/18.  
2 G/STR/N/1 7/NZL. G/STR/Q1/NZL/21  
 
- 2 - 
 
  • the Chair plus two of the five board members will be fully independent of the kiwifruit 
industry, and will be appointed by th e Minister for Primary Industries. Kiwifruit growers 
will elect the remaining three board members. The Chair has a casting vote.  
• KNZ will have three -yearly statements of intent that will be approved by the Minister for 
Primary Industries.  
• The Ministry for Primary Industries will engage annually with KNZ to discuss performance 
against its statement of intent.  
The amendments came into effect on 1 August.  
 
Question 2  
 
Regarding Kiwifruit importations, the notification states that Zespri is not involved in this  
transaction, and Table I, specifically the column corresponding to imported quantities, 
reflect "nil" imports. Even -so, an average import price has been provided for 2016 -2017 
and 2017 -2018. Could New Zealand please clarify why these prices were notified?   
 
Reply : 
 
There are no restrictions on who can import or sell kiwifruit in the New Zealand market, and kiwifruit 
is popular with New Zealand consumers, as it is with overseas consumers.  
 
For the purposes of completeness New Zealand's notification provides  information on kiwifruit 
imports into New Zealand, "Average import price" for 2016/17 and 2017/18, and the "average 
representative domestic sales price (estimate – NZ$/Kg)3" for kiwifruit.  
 
Question 3  
 
The notification provided gives us information regarding how important Zespri is in 
relation to New  Zealand's exports but does not provide data regarding the company's 
share in the world exports. As stated in our intervention at CoA June 2018, where we 
expressed our support for the EU's questions and our various concerns regarding Zespri, 
looking at the firms' 2016/2017 annual Report, approximately 10% of the revenue from 
sales of Kiwifruit are from Non -New Zealand grown kiwifruit. As indicated in the same 
document, these revenues have increased in the last years, and the company expresses 
that sources of production are likely to diversify in the coming years. Could New Zealand 
complement the information provided in order for the Membership to assess Zespri' s 
actual importance in the world Kiwifruit market?  
 
Reply : 
 
New Zealand takes a broad interpretation of the definition of a state trading enterprise (STE) Under 
the Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and  
Trade 1994 , so while Zespri is not a 'marketing board' or government owned enterprise, New Zealand 
has notified Zespri as an STE because of its automatic, but not exclusive, right to export kiwifruit 
from New Zealand to markets other than Australia . This regulated right does not extend to Zespri's 
commercial operations beyond the export and marketing of kiwifruit from New Zealand.  
 
This right also does not make Zespri a government owned commercial entity. Zespri is a private 
company, owned by growers and former growers. The New Zealand Government has no equity 
shares in Zespri, and no role in its management.  
 
New Zealand's notification is complete and provides all information relating to Zespri' s operations as 
an STE.  
 
 
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3 Average domestic sales prices are average peak season price and average full year price.