How A Kiwi Smuggling Scheme Cost One Man $8.5 Million
It's hard to believe a little fuzzy brown fruit could be at the root of so much trouble. Until that is, you realize just how valuable the kiwi business is to the country of New Zealand. According to Fresh Facts, the annual publication of New Zealand-based Plant & Food Research, kiwifruit is the country's single most valuable horticultural crop, accounting for 40% of the country's total horticultural export value. In 2021, New Zealand exported about $2.7 billion NZD of kiwi.
In 2010, a disease called PSA affected kiwi orchards in New Zealand, and the owners of those orchards were forced to rip out vines. The disease devastated the kiwi industry, and the industry raced to develop disease-resistant varieties of the fruit. Zespri, the giant kiwi cooperative, came up with the answer in the form of a golden kiwi called the Sungold variety. The New Zealand kiwi industry was saved, but at great expense to Zespri, which now licenses orchard owners to grow its Sungold variety at the rate of around $500,000 NZD per hectare.
Enter Haoyu Gao, kiwi smuggler
Kiwi originated in China, but New Zealand made the fruit a commercial crop. In 2021, China imported nearly $650 million NZD of kiwi. China is also an exporter of kiwi, so there's kiwi interdependence and competition between China and NZ, which sets the stage for our heist. According to The Guardian, a Chinese man named Haoyu Gao bought a kiwi orchard in 2013 in the NZ town of Opotiki. When Zespri began hearing rumors that Sungold kiwi — their proprietary variety — was growing in China, they investigated and tracked the source to Haoyu Gao, who they found to have smuggled kiwi budwood to Sichuan, China, where he sold it for $60,000 NZD per lot.
Zespri didn't play around. The company took Gao to court in New Zealand, and in 2020, the High Court ordered him to pay Zespri $15 million NZD. Gao appealed the decision and lost in 2021, though the damages were reduced to $12 million NZD — about $8.5 million USD.