NZ: Veg growers concerned about competition from co-op

Some shareholders in large vegetable distribution co-operative MG Marketing are upset the co-op has started to grow vegetables in competition with them. The "producer in its own right" role taken on by MG Marketing could financially harm the growers it represents, growers representatives said.

MG Marketing is the trading name of Market Gardeners Ltd, one of New Zealand's biggest co-operative companies specialising in growing and distributing fresh produce. It has run for more than 90 years and competes against the likes of Turners & Growers.

Max Lilley, former chairman and president of the NZ Vegetable and Produce Growers' Federation and now retired, said the co-operative was making the wrong decision by apparently buying into some vegetable and produce operations.

"MG Marketing is now growing produce in competition with co-operative shareholders such as pumpkins and tomatoes and I'm not sure how many other vegetables," Lilley said. The co-operative was set up to market growers' produce in an orderly manner, but had now decided to grow produce itself to secure production, it said. Lilley said while shareholding growers would gain some financial benefit from the co-operative's ownership of farms, most of their profit each year came from "the action of growing".

NZ Hothouse Ltd managing director Brett Wharfe said he was also concerned about MG Marketing being a producer, competing "with us, its shareholders". NZ Hothouse is one of the 10 largest shareholders in MG Marketing, holding 1.87 per cent of the cooperative. Wharfe had requested these issues be discussed at the MG Marketing annual meeting due to be held on November 27 in Alexandra.

He said while the chairman, Brian Gargiulo, had acknowledged his concerns in a discussion document for the meeting, Wharfe was not happy. "We have concerns whether the directors have a mandate to purchase properties that are simply going to be competing with their co-operative members."

Source: stuff.co.nz