Purpose of the proposals


At the Special Meeting on 14 March 2018, Zespri will ask for shareholder approval of an amended Constitution. This short guide outlines the key changes that will be proposed.


The definition of producer is changed by virtue of an update to the Kiwifruit Export Regulations. A ‘producer’ is ‘an owner, or lessee under a lease of at least one year’s duration, of land in New Zealand on which kiwifruit is produced for supply to Zespri Group Limited.’


(See Explanatory Note for further information).

The entitlement to buy shares and to vote is still held by producers alone. The shares must be owned by the same legal entity which either owns or leases a producing orchard.

A grower can be misaligned if they own an orchard in the name of one legal entity, call it ‘Family Trust A’, but they own shares in the name of a different legal entity, call it ‘Orchard Partnership B’.

The result is that the different entity called ‘Orchard Partnership B’ would be considered ‘dry’ (a non-producer) unless it leases the orchard and has a lease of at least one year’s duration (or owns the orchard in place of Family Trust A). If shares are not owned by the exact same legal entity which owns the orchard and there is no lease, the shares are considered dry.

As a result of the change to lessee entitlements, Zespri requires a copy of the lease documents to verify the agreement. Note: this rule currently applies.

The grower cannot vote the shares held by Orchard Partnership B, because voting entitlement is held by the legal entity which either owns or leases the orchard(s). Under the amended Constitution, the grower could lose dividends on those misaligned shares following a transition period.


(See ‘Rules Explained’ for detailed information).

The amended Constitution proposes a cap of four shares per tray for producer shareholders.

Trays are calculated on an average of the best two years of production out of the last five years of supply for a particular KPIN.

If a producer is or becomes overshared, they will be prohibited from buying any additional shares. The producer will not be able to buy shares in excess of the four-to-one share cap.

The Board of Zespri has the ability to require a compulsory sale of shares held over the cap based on two conditions:

Seven years: there is a transition period of seven years for producers already overshared at the time the new Constitution rules are introduced.

Three years: there is a period of three years for those who become overshared after the new Constitution rules are introduced.

At the end of these time periods, the Board can undertake a compulsory sale of the number of shares over the share cap.


The amended Constitution proposes to allow new entrants to the industry 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 last three years (a ‘greenfield’), and if they obtain a KPIN in order to start an orchard.

The number of trays used for the calculation is the average number of trays produced in the relevant region (‘Deemed Production’).

The shares cannot be voted until the new entrant achieves actual production. This entitlement to hold one share per tray of deemed production lasts for up to three years from the date the KPIN is allocated, after which the standard share cap applies.

New entrants must have no other sites where they are producing kiwifruit as an owner or lessee to be entitled to this benefit.

If after two years, upon inspection by Zespri, no suitable progress at the KPIN is shown, Zespri may require that the new entrant sell their shares within six months.


(See ‘Rules Explained’  for detailed information).

The amended Constitution proposes the removal of rights to dividends for non-producer shareholders (‘dry’ shareholders) based on two conditions:

Seven years: there is a transition period of seven years for shareholders already ‘dry’ at the time the new Constitution rules are introduced. Dividends would then cease once this transition period has lapsed.

Three years: there is a period of three years for shareholders who become dry after the changes to the Constitution are introduced. Dividends would cease three years after they cease producing for supply to Zespri.


(See ‘Rules Explained’  for detailed information).

The new Constitution proposes that voting entitlement be based on whichever is the lower from (1) one share per tray of that property’s production, or (2) the number of shares the producer holds.

Voting rights would be shared between the owner and lessee according to the landowner priority rule. If both landowner and lessee hold shares, the landowner takes priority to use the votes attached to the shares as a result of production, unless that lessee has an existing long term lease or a Glasgow lease.


Where a producer owns or leases more than one KPIN, their total entitlement to own shares and to vote is the sum of its entitlements from each KPIN owned or leased.

The ownership or control of the legal entity that owns or leases a KPIN is irrelevant in determining entitlement to production from a KPIN.


Zespri will advise each shareholder of their status on an annual measurement date. The calculation will be based on:

  • Production from a KPIN, calculated following the end of a season.
  • The KPINs owned or leased by the shareholder on the measurement date.
  • The number of shares held by the shareholder on the measurement date.

However, a shareholder’s status can change at any time during the year due to:

  • Orchard ownership or lease transactions;
  • Share trading by the shareholder, or by the owner of an orchard leased by the shareholder.

Any such changes will be recorded and used to recalculate entitlements as the changes occur.

For the purpose of voting at the Annual Meeting, the measurement date for determining who can vote and their number of votes is calculated before the meeting.

For the purpose of calculating dividend payments, the measurement date on which Zespri determines who is entitled to a dividend, and their number of shares, is set by the Board in accordance with the Companies Act. Zespri uses shareholding figures on the date decided by the Board close to when the distribution of dividend is actually made, which is called the ‘record date’ (which date is published in the monthly Kiwiflier newsletter).


(See Explanatory Note for detailed information).

A lessee has an entitlement to take up the balance of shares, below the share cap not taken up by the landowner producer. The lessee can also take up the ‘headroom’ votes under the voting cap not used by the landowner. If the combined shareholding of the owner and lessee exceeds the shareholding cap, then (subject to specific exceptions for Glasgow or existing longterm leases) the lessee must dispose of their shares before the landowner is required to do so.

Whilst Zespri has endeavoured to ensure that the information provided in these documents is accurate, the proposals for amendments to Zespri's constitution are still in the process of being finalised, and therefore may be subject to change. Zespri shall not be directly or indirectly liable (whether in contract, tort or otherwise) to any person for any statement, representation, misrepresentation inaccuracy, omission or otherwise in respect of, or any reliance by any person on, any information or documentation Zespri or any of its representatives directly or indirectly makes available or otherwise discloses (whether orally or in writing) in this document or in relation to this document. Updates to the proposals will be made available here on the website and the final proposals will be contained in the proposed constitution issued for voting purposes prior to the Special Meeting.