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FPJ discusses restrictive marketing of new table grape varieties

14 December 2011

In its South African grape feature, British trade publication, Fresh Produce Journal, reports on some disquiet back in the vineyards of the Cape.

There are some grumblings back in the table grape vineyards of South Africa – not so much about the prospects for the season or the present state of the world economy, but rather the marketing rights of certain of the new varieties available to growers in the industry.

There is growing unhappiness amongst South African table grape growers at what they see as unjustified and unwarranted interference in the marketing of new table grape varieties, writes Fred Meintjes from Cape Town.

This comes at the start of the 2011-2012 season in which South Africa is expected to pack, if all goes well, close to 52 million cartons of grapes. While Western Europe and the United Kingdom will still receive the lion share of these volumes, South African growers are increasingly shipping more fruit to markets such as Russia, the Middle and Far East. In this way they are reducing their dependence on the traditional markets. 

The controversy over marketing rights of new varieties has been growing steadily in recent years. Over the past decade there has been a clamour by every one from plant breeders to exporters to get their hands on the exclusive marketing rights of new varieties. This is increasingly seen as offering a strategic competitive advantage to those who control not only the plant breeders’ rights, but also the marketing of the varieties.

Growers are getting hot under the collar about those who control the marketing of these varieties and who therefore force growers who plant them to market them through certain designated channels. These feeling are now increasingly boiling over.

A growing number of table grape growers have told Fresh Produce Journal that they will not plant any new varieties if there are any restrictions on the marketing of the grapes. “We are prepared to wait for new varieties where there is no such control and there are today increasingly more options to choose between certain varieties,” says Orange River grape grower Alwyn Dippenaar.

It is not surprising that just about every grape grower in South Africa traveled to Aussenkehr in Namibia at the start of this season to have a look how the so-called ‘Arra’ range of varieties are performing under local conditions. These varieties, along with new ranges such as those available through South African breeding pioneer, Aat Hoekstra, are increasingly seen as better options than those available from companies who want to dictate the marketing of the grapes.

Mr Hoekstra is credited to bringing such varieties as Prime, as well as the exciting new early red seedless cultivar, Starlight, to the South African industry without any restrictions on the marketing. “We should build a monument for Oom (uncle) Aat,” says Leon de Kock of Grape Alliance, one of the leading grape marketing groups.

“We are happy for plant breeders to sell and cover their cost via the sales of the plant material and to collect royalties on every carton we export,” says one large grower. “Unless they market the varieties themselves, we do not see how they add any value to the product. Even if they do market the varieties directly, we do not want to be told how, where and when the varieties we grow should be marketed.”

Growers point out that most new grape varieties are not sold under their particular name, but simply as part of the white, red or black seedless category. 

This strong stance by growers is not restricted to the table grape sector. It has been a long and hard struggle for South African growers from the days of a regulated industry, through the period where they saw themselves at the mercy of exporters, to where they are increasingly marketing their own fruit directly to their customers.

“We are taking the risk of planting the variety and paying for every plant and the royalties that apply to them once we pack the fruit. That is where the control must end and where we can apply our growing and marketing skills to ensure the best returns for the product,” says Anton Viljoen, leading grower in the Northern and Western Cape region.
 

Sun World International’s recent decision to extend its South African marketing portfolio by granting licenses to New Vision and Suiderland to market their own Sun World varieties is seen in the industry as an attempt to address the growing disquiet amongst growers.
 

“They had no choice because they could not withstand the pressure anymore. It however leaves the other growers out of the cold. They have taken the same risk in planting the varieties and are not happy to simply be dictated to how their fruit should be marketed,” says one grower.
 

The recent court case between South African exporter Colorsfruit and the AMC Group regarding five new Sheehan varieties has also thrust the ongoing battle for marketing control of new grape varieties into the limelight. While Colorsfruit was granted the ownership of the material already in South Africa by order of the South African High Court, there are various appeals and arbitration hearings that still need to be concluded.
 

Several growers who have either planted some of the five new varieties are now waiting for final confirmation of what is going to happen with them, particularly who will control the marketing. “We have planted two of these varieties, Krissy and Melody, but until we know what is happening with the marketing their future with us is uncertain,” says Anton Viljoen.
 

With black seedless varieties being very much hot property at present there is naturally much focus on new varieties in this category. Midknight Beauty, from Sun World, has been fairly widely planted, but those growers who do not like the marketing arrangements are not keen to plant more vines and focus their attention on Autumn Royal as their preferred variety. Presently there is very little else available and growers say they will be watching this category keenly for new varieties which do not carry marketing restrictions.
 

Amongst the red seedless varieties it is certain that Starlight, which ripens after Prime, is receiving much interest from growers, particularly because there are no marketing restrictions. A stark contrast to this is the marketing of Ralli Seedless in the Far East region, which can only be done via certain marketing channels. This is a variety which was launched with great potential in South Africa nearly ten years ago, and was considered an ideal variety for the Far East markets.
 

The marketing arrangement for Ralli Seedless in the Far East allows many parties in the line between grower and customer to take a cut of commission. “That is unsustainable and we therefore market these grapes mainly in Europe, and often simply as red seedless,” says Michelle Steenkamp of Southern Farms.
 

With most of the South African grape regions predicting better crops than last season, it will be interesting to see if trends in market shifts which manifested themselves last year will continue. Last season sales of South African grapes in the Far East region grew by 26%, although at 12,7% of the total export volume it was still relatively small. With sales in Southern Africa also rising, last season saw a 12% decline in sales to Northern Europe and 30% decline in sales to the UK. 
 

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