O'Connor Damien: Hop Industry Restructuring Bill — Second Reading Procedure Third Reading 
O'Connor Damien: Hop Industry Restructuring Bill — Second Reading Procedure Third Reading 
[Volume:607;Page:4845] 
Hon DAMIEN O'CONNOR (Associate Minister of Agriculture) 
: 
 I move  
That the Hop Industry Restructuring Bill be now read a third time 
. This bill was introduced into the House on 19 March 2002. It had its first reading on 1 October 2002 and was referred to the Primary Production Committee on that day. The select committee amended the restructuring day as requested by the New Zealand Hop Marketing Board and reported the bill back to the House on 4 December 2002. The bill restructures the New Zealand Hop Marketing Board into a cooperative company—New Zealand Hop Marketers Ltd—and removes the regulatory controls on the domestic marketing and export of hops. 
Hops are grown for the flavouring of beer—for those who do not know. New Zealand production is concentrated in the Nelson-Motueka district and I am proud to say that about 90 percent of that is in the Tasman district in my electorate. Exports of around $8 million of hops and hop products go from New Zealand each year. The New Zealand Hop Marketing Board was established under the Hop Marketing Regulations in 1939 to coordinate the marketing of hops to breweries both in New Zealand and overseas. The regulations provide that the board is the sole agent of growers in the sale and export of New Zealand grown hops. Today the Hop Marketing Board is the only statutory single desk to retain domestic marketing powers as pointed out by Mr Smith. 
When the board was established the industry was predominantly domestically focused. Today over 80 percent of the annual production of New Zealand hops is exported. The current regulated structure of the New Zealand hop industry is outdated and out of step with the international trading environment for hops and hop products. The board sought the bill on behalf of hop growers to enable the hop industry to respond positively to the challenges of the international market. New Zealand accounts for just 0.6 percent of world production. The price of hops in New Zealand generally reflects the world price and the worldwide demand for hops is dependent of course on beer consumption. 
The bill means that the industry can be more flexible in responding to changes in consumer tastes for example towards speciality beers. The removal of the single desk will improve market signals to growers we trust. 
Hops are unusual in that they are particularly sensitive to the latitude and climate in which they grow. Due to this latitudinal sensitivity hops are grown in relatively few countries throughout the world the majority of which are in the northern hemisphere. This enables New Zealand to provide out-of-season hops to the northern hemisphere. New Zealand has unique cultivars bred at the Riwaka research station that demand a premium in some markets. The bill enables growers to retain joint ownership with the Crown of these unique varieties by transferring the board’s ownership rights in the cultivars to the grower-owned cooperative company. 
There is a strong tradition and culture of cooperation and coordination within the New Zealand hop industry. The bill gives effect to the industry’s request for defining its ownership rights in the board releases the board from the regulatory constraints imposed by the regulations and the two old Acts and deregulates the sale and export of hops. 
The difference in this Government’s approach to producer board deregulation is that we have responded to requests from the industry not threatened the industry with deregulation as did the last Government. We have delivered to the hop growers a cooperative structure not forced on them a corporate structure as the previous National Government did to ENZA. That is one of the key differences and that is the reason I support this bill through the House. I wish the industry well in the restructuring of the board and I am sure that it will do its best into the future. I commend this bill to the House.