Jun 27, 2025
As producers, we all share a common interest in building a velvet industry that delivers sustainable returns, upholds market confidence, and operates on a level playing field. Following constructive discussion on this topic at the Industry Conference in Queenstown, a dedicated Export Licensing Working Group (ELWG) was formed. It is now actively evaluating the merits of export licensing for velvet.
Among the feedback from Conference attendees was a clear desire for timely action, that any changes should have real consequences to drive improved outcomes, and that any new system should avoid imposing financially material costs on participants. The ELWG is taking this feedback on board as it carries out its evaluation.
The ELWG — a representative body that includes velvet farmers, processors/exporters, and DINZ Board members — met in Christchurch on 19 June 2025. While DINZ acknowledges that not every voice can be directly involved, care has been taken to ensure a balanced mix of perspectives and expertise. At this stage, the group is focused on understanding the implications of export licensing — including its potential benefits and trade-offs. No decisions have been made.
Why export licensing?
Export licensing is not a new concept. Other primary sectors have adopted this model to strengthen standards and improve long-term returns. One such example is the Horticultural Export Authority Act 1987 (HEAA). Any application under the HEAA must be supported by an Export Marketing Strategy — a coordinated, sector-wide plan that demonstrates how the industry will work together to improve performance and unlock greater value.
To support this evaluation, DINZ met in early June directly with the Horticulture Export Authority (HEA) and engaged external legal counsel to collectively better understand the process, performance benchmarks, and governance requirements under the Act.
Laying the groundwork
As part of its evaluation, the ELWG is also considering whether updates to the VelTrak Terms of Use — for the 2025/26 season — could strengthen integrity at the domestic end of the supply chain. While these changes are still under evaluation, they could help ensure that only compliant operators — those meeting requirements under the Animal Products Act 1999, including the RCS, and levy obligations — retain access to the system.
Such updates would not only address current issues within the domestic supply chain but also lay the groundwork for a credible export licensing application by demonstrating that the industry has the systems and discipline required for a regulated framework.
In this way, the proposed updates to VelTrak could contribute meaningfully to a wider Export Marketing Strategy and support any future application under the HEAA should we go down this path.
What might change?
While no final decisions have been made, one option under consideration is to limit VelTrak access to velvet buyers that meet baseline compliance requirements — including timely return filing and levy payment. The aim is to discourage behaviours that undermine trust, distort competition, or erode value.
Under this approach, non-compliant registered velvet buyers could be suspended from VelTrak. Access would only be reinstated once the relevant compliance issues — such as overdue returns or unpaid levies — have been resolved. If progressed, the updated Terms of Use would come into effect for the 2025/26 velvet season
What it means for farmers
Most velvet producers won’t notice any immediate change — particularly those already working with buyers, processors, or exporters who meet their obligations in respect of monthly return filing and levy payment compliance. But the direction of travel is clear: strengthening the system to support compliant operators and create long-term value.
Summary and next steps
These discussions are about preparing the velvet sector for long-term success. Export licensing under the HEAA requires robust systems and an agreed marketing strategy. The proposed updates to VelTrak represent a practical first step toward demonstrating that the industry is committed to transparency, traceability, and meeting the evolving expectations of customers — especially in key markets such as China and Korea.
The ELWG will continue to evaluate these options over the coming weeks. Further communication will happen through industry channels and DFA engagement. A recommendation will be presented to the DINZ Board in mid-July.
Feedback is welcomed from across the industry as this evaluation continues.
