Bay of Plenty Business News March/April 2018

8 BAY OF PLENTY BUSINESS NEWS March/April 2018
Zespri gets tick from growers
for share changes
Major changes to Zespri’s share structure have been welcomed
by the sector’s grower body as the export marketer moves
to more closely align its ownership with those responsible for
producing the fruit.
By RICHARD RENNIE
The changes resolve the
longstanding problem of
so-called “dry” shareholders
- those who have
shares in Zespri, but are no
longer actively growing kiwifruit.
The changes are Zespri’s
attempt to deal with what chairman
Peter McBride described
as a concerning mis-alignment
of ownership between growers
and non-growers.
Almost 30 percent of shareholders
are currently below
the 1 share:1 tray ratio, while
eight percent of growers are
over the 4:1 share cap Zespri
proposed in the constitutional
changes. Meanwhile, 15 percent
of Zespri’s 120 million
shares are held by people who
are no longer connected with
the industry.
A special general meeting
held in mid-March drew the
required 75 percent-plus grower
support for the changes.
After almost five years and a
major industry strategy review,
kiwifruit growers have agreed
to the proposed changes to
Zespri’s constitution.
There are now caps on the
ability of non-producing shareholders
to continue owning
shares, as well as a focus on
getting new growers to own
shares representing the volume
of crop they contribute.
Growers who are overshared,
with more than four
shares per tray of production,
will face a cap on their ability
to buy more shares.
And those over-shared at
the time of the new rules will
have seven years to sell the
surplus shares, and three years
for those who become overshared
after the rules are introduced.
In an effort to better align
the 18 million shares attached
to non-growing owners, Zespri
has set a dividend cap on
non-producing shareholders,
who now face a fade out period
of seven years on their
dividend payment.
“We are at a critical junction
with a unique opportunity
to formalise what the majority
of owners have asked for,” said
McBride.
The changes have been welcomed
by Nikki Johnson, chief
executive of grower body New
Zealand Kiwifruit Growers
Incorporated (NZKGI).
“On behalf of NZ’s kiwifruit
growers, NZKGI is pleased
with the outcome of Zespri’s
Special Meeting,” she said.
This support for
change reflects the
cohesiveness of
our industry and a
common interest
among growers and
former growers in
seeing it prosper.
“The passing of the resolutions
at the Special Meeting
was the final step in achieving
what growers indicated
they wanted in the Kiwifruit
Industry Strategy Project.
“In 2015, around 90 percent
of growers voted in the
KISP referendum to support
proposals to change Zespri’s
constitution to allow for alignment
between growers and
shareholders.”
McBride gave a brief history
lesson on Zespri’s creation
back in 2000, when growers
had sought government
approval to make the marketer
a full co-operative.
“Treasury would not allow
NZKGI’s Nikki Johnson: Growers supportive of changes
to address dry shareholding issue. Photo/Supplied.
it – but that is where we are
wanting to head back to today.”
McBride said dealing with
the share allocation was also
a significant succession issue
that needed to be addressed,
just as in any farm or orchard
operation’s ownership.
“The outcome will be
important for the next generation
of kiwifruit growers.”
To facilitate the entry of
newer growers as shareholding
operators, the changes have
included an allowance for new
entrants to have the entitlement
to buy shares up to one
share per tray. This is if they
own or lease a site on which
there is no history of production
in the past three years.
Those shares cannot be voted
with until the orchard begins
production.
A share buy-back programme
will also target those
growers who are over-shared
and non- producing share holders,
purchasing their shares at
fair market value, and targeting
a share issue to unshared
and under-shared growers.
“This support for change
reflects the cohesiveness of our
industry and a common interest
among growers and former
growers in seeing it prosper,”
said McBride.
“The measures require
a huge amount of goodwill,
but ultimately they will support
Zespri’s ability to deliver
strong, sustainable value to
kiwifruit growers and shareholders
over the long term. It’s
a fantastic legacy for the next
generation of people in our
industry.”
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