Discrimination, Diversification, Prior Notice and Information Disclosure (Mitigation Measures)
KNZ regulates the “mitigation measures”. The purpose of the mitigation measures is to mitigate the costs and risks associated with the single desk. More specifically, the mitigation measures aim to encourage innovation while managing risks, promoting efficient pricing signals, providing protections for kiwifruit growers, and promoting downward pressure on Zespri’s costs. KNZ carries out its functions to best achieve these purposes.
There are four mitigation measures that KNZ is responsible for monitoring and enforcing:
The Non-Discrimination Rule
This rule provides that Zespri must not unjustifiably discriminate in the way it purchases New Zealand grown kiwifruit.
The Prior Notice Rule
Before carrying out activities that are not core business, but do support core business, Zespri must inform KNZ.
The Non-Diversification Rule
Zespri is prohibited from carrying out activities that are not core business and do not support its core business (as defined in the Regulations) unless approved by kiwifruit producers.
The Information Disclosure Requirements
Zespri is required to make certain information (e.g. financial statements and kiwifruit supply contracts) available to the public and KNZ within specified timeframes.
KNZ determines, monitors, and enforces the collaborative marketing requirements detailed in the Regulations. This includes Zespri’s collaborative marketing obligations and the collaborative marketing application process. Where a person, other than Zespri, wishes to export New Zealand grown kiwifruit, they may apply to KNZ to be approved to export in collaboration with Zespri.
KNZ will only approve an arrangement if it considers the proposed arrangement meets the test of increasing the overall wealth of New Zealand kiwifruit producers. Collaborative marketing is intended to increase grower choice, innovation, and market opportunities, thereby increasing kiwifruit industry performance and returns