Apple growers seek compensation

HAMISH RUTHERFORD
Last updated 19:49 24/05/2013

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Apple growers are joining the queue for compensation from the Government after produce was blocked on its way into Russia.

Prime Minister John Key said today  it was possible meat companies could be compensated for costs associated with a lengthy trade block into China, blame for which has been placed squarely on the Ministry for Primary Industries (MPI).

According to the Government, the ministry had issued unauthorised documentation, prompting Chinese ports to refuse entry for all beef and sheep meat.

On Thursday. Primary Industries Minister Nathan Guy launched an attack on his officials, saying they had initially underplayed the significance of the holdup, which saw all sheep meat and beef blocked from entering the Chinese market.

Mr Key echoed Mr Guy’s comments, saying MPI did not raise the issue as a high priority.

It was possible that compensation would be paid for the incident, Mr Key said.

"I haven’t seen any advice on that but there will be some sort of cost. I think it will be relatively minimal and it’s potentially possible that MPI will have to pay it."

One source estimated the cost, mainly related to having containers stuck at port incurring fees, could be millions.
Mr Key’s comments prompted calls for compensation from the apple industry, which suffered a similar, albeit smaller, problem in March, which was initially denied by MPI.

Alan Pollard, chief executive of Pipfruit New Zealand, said MPI had later said 40 containers were delayed entering Russia.
Mr Pollard said even the later claim was "disingenuous" as another 60 containers were also affected.

He was disappointed MPI had not admitted the issue earlier.

"The comments would make growers think the issues they were facing were not important, but it was a big issue for our guys.

Exporters had faced additional demurrage costs for containers stranded at ports – of up to $4300 a container – while a huge quantity of apples arrived on a market at once, suppressing prices.

The industry wanted to know the problem would not occur again, and that if another industry was being compensated, it would get its costs recouped too.

"If they do [compensate meat companies] they need to also consider the impact on apple growers, and exporters who suffered quite significant costs."

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- BusinessDay.co.nz

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