The kiwifruit exporter Zespri is reassuring growers it will not be taking money from their returns to pay for a million-dollar fine its China-based subsidiary has incurred.
A Shanghai court has convicted the subsidiary, Zespri Management Consulting Company, and one of its employees on charges of evading customs duties.
The employee has been sentenced to to five years' jail and the company has been ordered to repay $10 million of what the court calls illegal gains.
Zespri says the fine money will come out of a fund that pays for overheads.
New Zealand Kiwifruit Growers chief executive Mike Chapman says it's a corporate matter and the corporate should pay, not growers.
"Normally with situations like this," he says, "Zespri's corporate funds would pay for it, so it would not be taken from growers' returns."
Mr Chapman says growers are concerned about the prosecution and its implications, and an independent inquiry will try to get to the bottom of what happened.
Grower thinks Zespri has been naive
Coromandel kiwifruit grower says Andrew Hill says he has confidence in Zespri's overall ability but he thinks they have come unstuck in China.
"The main thing it would say to me is that they've been naive in their arrangement in China... They believed the agent was going to pay the duties and he obviously hasn't and it's left them with a mess."
Zespri, which pleaded not guilty to the charges, is considering appealing the conviction and has 10 days to do so.
Inquiry into what happened
The Chinese importer used by Zespri from 2008 to 2010 earlier admitted charges of criminal smuggling and has been sentenced to 13 years' jail.
He has repaid about $7 million - the amount of the underpaid customs duties - but is appealing his sentence.
Zespri says it's now operating under new export and import arrangements which appear to satisfy the Chinese authorities.
Mr Chapman says an inquiry will look into what happened, as well as looking towards the future to ensure that what is now in place will not cause problems.
Mr Chapman says those appointed to the inquiry include a person who has experience in China with importing, exporting and marketing, and some of the organisation's key members.
"The inquiry's independent of Zespri," he says, "it's independent of other participants in the kiwifruit industry and it's designed to get to the bottom of what happened and to give us an understanding of what happened."
Mr Chapman says he expects the inquiry to be finished in May.