Merger of Apple Board and fruit growers mooted

Press, 3 August 1983, Page 3

Merger of Apple Board and fruit growers mooted

Nelson reporter The merging of the Apple and Pear Board and the Fruitgrowers’ Federation as a means of cutting “tremendous” administration costs, was suggested to fruitgrowers in Nelson yesterday, by Mr Rod Weir, a government - appointed member of the board. Mr Weir, in the keynote address to the first pipfruit sector conference of the federation, said he had always found great difficulty in justifying the continuation of the federation and the board as separate entities. There was a tremendous duplication of costs, with two boards of directors, two offices in London, two marketing managers travelling on the same plane (one to sell kiwifruit and one to sell apples) and two head office administration costs, “to name but a few,” he said. “Every time I go to Gisborne and see the federation building with its telephones, office manager and other infrastructure, I cannot help but wonder why this is not looked at when the board has a similar building and cost structure a few yards away, virtually owned by the same people. I wonder even more when the Apple and Pear Board’s building is used for a few months of the year,” he said. “Shouldn’t we consider moving in the same way as other commercial enterprises and that is to have a

company with the board as a marketing arm in the form that it is today? “The duplication of costs is frightening and one does not need a college education to work out that the savings that can be made would be enormous and help your bottom line profit,” he said. “There is also the additional efficiency that would be created by the two organisations merging. It would need only one board of directors, one computer, one administration; and the like,” said Mr Weir. Speaking on the board’s capital investments, particularly in cool stores, Mr Weir said that the recentlybuilt cool store in Hastings cost about $5 million and was in use for about three months a year. If the interest rate on this investment was at 15 per cent, $750,000 a year in interest alone was being paid out, not to mention rates, insurance, maintenance and the like, all of which would take the figure closer to $1 million a year, he said. It was imperative that some new method be found to get the fruit from the tree to the ship in a much less costly manner than the way it was being done at present, said Mr Weir. This applied not only to cool stores but also to forklift trucks, straddle trucks, processing plants and most of the capital assets and plant of the board.