Zespri investigates reported arrests of Chinese import agent

Zespri investigates reported arrests of one of its Chinese import agents

By Fiona Rotherham

Jan. 22 (BusinessDesk) - Zespri International, the world’s largest kiwifruit marketer, said it’s investigating reports that staff at one of its new import agents in China have been arrested by Chinese customs, although there's nothing to indicate any investigation by authorities involves New Zealand kiwifruit.

The company, Dalian Yidu, a major Chinese fruit and vegetable logistics and cool store provider based in Dalian, is understood to import many New Zealand and global agricultural products. According to a National Business Review report, nine staff at Dalian Yidu are understood to have been arrested in relation to importing prohibited fruit as well as an ongoing investigation, that started in March last year, into alleged under-declaration of customs duties.

Zespri communications manager Oliver Broad said a lot of uncertainty remains around what has happened with Dailan Yu and it is trying to find out more.

“It is one of Zespri’s importers into China, dealing with less than 5 percent of Zespri’s China volume,” Broad said. China took 10 percent of Zespri’s 93 million tray export volumes last year with Dalian Yuidu handling around 4 percent of that.

Zespri’s New Zealand supply season to markets, including China, finished a few months ago and it has no financial exposure to Yidu, Broad said.

The company appointed Dalian Yidu as its sole agent and importer in Northeast China last year, one of four agents it appointed in China after its previous agent and importer, Neuhof, was found guilty in 2012 for failing to pay import duties. In 2013 the Serious Fraud Office launched an investigation into Zespri’s double invoicing problems which led to its Chinese subsidiary being fined almost $1 million and an employee jailed for five years over the underpayment of customs duties on kiwifruit imports between 2008 and 2010.

In its most recent annual report, Zespri said as a consequence of the problems with its previous Chinese agent it would “strengthen the global compliance framework without losing our execution capability”. Initiatives included more oversight of agents and a customs audit of all direct sale market/customers to ensure all its importers acted in accordance with international best customs practice.

Earlier last year Zespri was caught in a second Asian market when Taiwanese kiwifruit importers were found to have created fraudulent invoices to reduce their duty payments. The invoices used Zespri logos and forged signatures of its personnel. Zespri ended its relationships with its three importers in Taiwan, which is New Zealand's seventh largest market for kiwifruit, and appointed new distributors last season.

(BusinessDesk)

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