Currant growers face uncertainty
New Zealand blackcurrant growers face an uncertain future after GlaxoSmithKline signalled a possible sale of its Ribena and Lucozade brands.
The international pharmaceutical group takes up to half the national crop for its drinks, paying growers a premium for the right fruit.
With international blackcurrant prices at a low ebb and many growers struggling with high exchange rates, low yields and weather-hit harvests, the withdrawal of GSK from the market would be a body blow for the industry, which is concentrated in Canterbury and Nelson.
This year the more than 40 growers produced 8500 tonnes of fruit, with just under a quarter coming from Nelson. GSK told The Guardian there had been immediate interest from investment banks after announcing a strategic review of its drinks brands, which is estimated could be sold for up to £766 million (NZ$1.4m).
The review was announced alongside a sharp fall in fourth quarter net profits - down nearly 35 per cent on last year at £839m.
The firm plans to make a decision on the future of Ribena and Lucozade by the middle of this year and says all options are being considered.
"No decisions have been taken or options ruled out - we could increase investments in certain parts of the world, find a partner or divest the products," said GSK chief executive Andrew Witty.
Blackcurrants NZ chairman Bill Jermyn said a sale was not a foregone conclusion and he was awaiting clarification. In the meantime, growers were likely to hold off making any decisions over on-farm investment or divestment.
However, he was confident GSK or a new owner would continue to use New Zealand fruit. "GSK has developed a lot of confidence in New Zealand growers. We have taken heart that GSK have always been prepared to pay for quality and they recognise us as a very reliable supplier of a safe product.
"We have a very tight regulatory regime for growing fruit and a tight traceability system and we have delivered good quality fruit for over 30 years so any new owner would have confidence.
"They might be able to buy cheaper fruit but they won't buy better fruit."
But Mr Jermyn conceded that the lure of cheaper European fruit might appeal to someone "with less understanding of the difference between cost and value".
He took heart that Ribena was a strong brand that its owners would want to preserve. It was one of the top 10 brands in Britain, and had existed since 1937.
If New Zealand growers did lose out, the industry would survive, even though GSK paid appreciably more for fruit than the NZ Blackcurrant Co-operative, he said.
"Some growers without a GSK contract do survive on the co-op price.
"We are resilient. Those of us in it, love it and we have learned to roll with the punches. I've been through too many seasons and frosts to be fazed by this."
Most Ribena and Lucozade is sold in Europe, and more than 90 per cent of farmed blackcurrants in Britain and Ireland end up in Ribena.
- © Fairfax NZ News
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