Zespri shareholders have voted to strengthen grower ownership and control of Zespri. The changes to Zespri’s constitution were backed by more than 75 percent of shareholders voting in a Special Meeting held on Wednesday in Mount Maunganui, with final results now confirmed. The resolutions implement a number of changes arising from a recent industry consultation.
Zespri Chairman Peter McBride explains the new constitution addresses a problem of growing misalignment between growers who supply kiwifruit to Zespri and people who own shares in Zespri. “A significant number of New Zealand kiwifruit orchard owners do not own Zespri shares and over 18 million shares are held by people who have left the kiwifruit industry,” explains Mr McBride.
The constitution puts in place a share cap with a maximum shareholding of four shares for each tray of production and introduces dividend restrictions on shareholders who do not grow kiwifruit. “Without these measures, there is a risk that, over time, ownership of Zespri would progressively move away from the current growers supplying Zespri and undermine the stability of our industry structure.”
Mr McBride says shareholders have voted to take advantage of a uniquely-important moment for the New Zealand kiwifruit industry.
“This support for change reflects the cohesiveness of our industry and a common interest among growers and former growers in seeing it prosper. 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.”
Another step to improve alignment is a targeted share issue and buyback programme. This was supported through a shareholder resolution and is planned for the second half of this year. It will be based on an independent valuation and target a share issue to unshared and under-shared growers, and a buy-back offer to non-producers and over-shared shareholders.
The changes to Zespri’s constitution follow a long period of consultation with growers, spanning nearly five years. It involved a grower referendum in 2015 with the highest turnout in a horticultural referendum in recent history, followed by amendments to the Kiwifruit Export Regulations last year.
“There are diverse shareholder positions in our industry and we have been committed to a fair process, respectful of all shareholders,” says Mr McBride. “The changes will come into effect over a number of years, with a substantial transition period in place. The steps we have taken today will help us to deliver sustainable wealth to New Zealand kiwifruit growers, the wider kiwifruit industry and the communities which rely on our industry.”