Zespri's lucrative new gold kiwifruit varieties G3 and G9 may be growing illegally in China.

A police investigation is underway in New Zealand to establish how the plants got there.

Zespri is working with the police regarding a possible breach of Zespri's plant variety rights to Gold3 (Zespri SunGold) and Gold9 (Zespri Charm).

The two varieties are subject to plant variety rights owned by Zespri in New Zealand and other jurisdictions.

Twelve months ago, Zespri received information about potential plantings in China and immediately began an extensive due diligence process.

The reports were confirmed late last year, which then led to the investigation by the authorities in New Zealand.

'Although we are now able to communicate some basic facts of the case, please note that the ongoing investigation limits the level of disclosure we can provide at the present time,” says a Zespri spokesperson.

'In responding to the case, Zespri is working with a number of parties to resolve the issue and we will update the industry in due course. We do not believe that the situation has any material impact on our outlook for Gold3.”

Zespri Chief Operating Officer Simon Limmer says Zespri is taking concerted action to protect and control its intellectual property.

'We are seeking action to protect our plant variety rights in New Zealand and deter any future breaches.

'Zespri's plant variety rights are important intellectual property, developed through extensive investment over many years. Although the plantings may be relatively small scale in this specific case, we have zero tolerance for any breaches that we identify, wherever they happen.”

Licences to grow the varieties are granted by Zespri to growers on a country-by-country basis, and can only be transferred within the same country subject to the rules of each licence.

The purported sale of a licence from one jurisdiction to another by a third party is a breach of Zespri's licences and plant variety rights, and potentially could give rise to allegations of fraud or misleading conduct.

In this case, Zespri suspects that several years ago plant material was transferred and planted in China on a relatively small scale.

"These allegations are very concerning, any illegal activity surrounding a breach of Zespri plant variety rights is a serious issue," says NZKGI CEO Nikki Johnson.

"While there is an investigation underway concerning the alleged breach of Zespri plant variety rights, there is little that we can comment on at this stage.

"NZKGI fully supports Zespri in taking any necessary action to prevent illegal activity and protect plant variety rights on behalf of New Zealand growers."

New Zealand kiwifruit orchardists growing the new gold varieties pay a significant sum in licence fees to Zespri but in return, achieve high returns for their fruit from international markets.

Zespri is expected to shortly call for tenders for G3 licences for a further 400 hectares of land in New Zealand.