Fred Wescott, who grows apples and operates Wescott Orchards and Agri Products, a packing facility in Elgin, Minnesota, told Good Fruit Grower that the exclusive license for SweeTango granted to Pepin Heights by the University of Minnesota has the potential to damage the local industry.
Wescott, a major fruit wholesaler who specializes in selling locally grown apples under the Upper Mississippi Valley Fruit brand, is one of the 14 plaintiffs in a suit filed to challenge the agreement between the university and Pepin Heights.
Wescott has built his company, which packs about 200,000 boxes of Upper Mississippi Valley growers’ apples each year, around varieties that are well adapted to the area and growers who produce well. He looks to the University of Minnesota as a source of good varieties.
But, to gain access to the 50,000 SweeTango trees allocated to Minnesota growers by the university, growers must go through Next Big Thing, a cooperative set up to grow and market the variety. The trees they plant are leased, not purchased. Growers outside the Next Big Thing cooperative pay up to $3 per tree per year royalty but do not pay royalties on the fruit. Growers may not sell them outside the state of Minnesota, may not pool them with others growers for wholesale distribution, and may only sell them directly to consumers or to retail stores.
Because they can only sell a limited quantity, a major contention in the lawsuit is that wholesale growers are damaged because they are denied the ability to offer a full line of varieties to their customers. Buyers often rely on one supplier, and Wescott has built his business on that basis. He buys and packs apples from growers in other areas so he can be a full-supply company.
Land-grant universities in New York and Washington State, which have recently released new apple varieties, offered all growers in those states exclusive access to the varieties, Wescott said. “This agreement does just the opposite. If SweeTango comes even close to the success level of Honeycrisp, it will be devastating to us in Minnesota.”
Honeycrisp killer
What has irked the Minnesota growers is publicity that referred to SweeTango as “the Honeycrisp killer” and “the successor to Honeycrisp.” The lawsuit says the publicity was a joint creation of the university and Pepin Heights.
“The growers of Minnesota took Honeycrisp to the marketplace and brought it to world prominence,” Wescott said. An estimated eight million trees have been planted. Consumer demand for SweeTango is being built on the reputation of Honeycrisp, he said, and it really showed last year during the media blitz over SweeTango. Consumers wanted that apple, Wescott said, even though it wasn’t available.
Now, with the patent on Honeycrisp expired, the university is looking to the new variety for royalty income, but this new apple will be raised by growers elsewhere and will displace Minnesota varieties, even Honeycrisp, he fears.
“This was not intentional, we don’t think,” Wescott said. “But we don’t think the university looked past the outside layer. The university has made itself a competitor to us, and the consequences need to be looked at. The agreement is wrong, and it’s got to be changed.
“The university has played a key role in developing a unique apple industry in this region. We want to support the university and the symbiotic relationship we’ve had for decades. This agreement drives a nail in our industry. This could have been done differently.”
Insulting
The Minnesota growers also consider it insulting, Wescott said, that university officials say the more restrictive limits on the SweeTango are meant to maintain high quality standards and protect the long-term value of the apple variety. Minnesota growers were, in large part, responsible for the success of Honeycrisp, he said.
The university’s policy, the complaint says, should be guided by two principles: “the maximum possible beneficial effect for Minnesotans and the larger public” and “a fair financial return to the university, as long as it doesn’t interfere with the first principle.”
While the numbers in the complaint exhibits are minimums and it is not known how many SweeTango trees have been planted or will be planted, the 50,000 trees allocated to Minnesota growers is a fixed number. Only three Minnesota orchards are included among the 64 growers who are part of Next Big Thing, the cooperative set up to grow and market SweeTango.
Response
In an interview, Dennis Courtier made several points in responding.
First, he said, Pepin Heights worked closely with the University of Minnesota, which has experience in such matters, in crafting the agreement. “We are confident it conforms with state and federal laws,” he said.
Secondly, he said, all Minnesota growers were offered the opportunity to join Next Big Thing and grow SweeTango apples. Two other orchards besides Pepin Heights elected to join in.
Thirdly, Pepin Heights was awarded the license for MN 1914 through a competitive process. “We weren’t the only one trying to get this agreement,” he said.
At the time the agreement was made, he said, it was not known whether or not SweeTango would be a huge success, and that is still not known.
“We want Minnesota growers and growers elsewhere, and the university, to prosper with this apple. It can be a win-win-win situation.”
John Byrnes, who works in communications for the Agriculture Experiment Station at the University of Minnesota, said the university would make a formal response within the 20 days specified in the court filing, in early July. He referred to a university publication last year that outlined the university’s reasoning in making the choice to release SweeTango as a managed variety instead of a public variety, as was done with Honeycrisp.
The reasons given were to assure production and marketing of quality fruit grown in the right place, and to prevent overproduction. The article said that SweeTango (the name comes from sweet and tang) had a more complex taste than Honeycrisp because of the better sugar-acid balance.
Honeycrisp took years to come to market, and SweeTango will come fast. While Honeycrisp generated about $8 million in royalties for the university, it generated very little income during the early part of its patent life. The patent expired last year, although it is still under patent in Europe, where it is sold as Honeycrunch.
Plaintiffs in the suit are: Aamodt’s Apple Farm, Apple Ridge Orchards, Richard Bremer, Bridal Rock Orchard, Cenco Farms, Croix Farm Orchard, Karl Townsend, Ferguson’s Morningside Orchard, JQ Fruit Farm and Orchard, Minnesota Apple Producers (dba Nelson’s Apple Farm), Sacia Orchard, Southwind Orchard, Van Lin Orchards, and Wescott Orchards and Agri Products.
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