Apple growers say deal isn't sweet, sue U, Pepin Heights
More than a dozen apple growers filed a lawsuit in Hennepin District Court on Wednesday over an exclusive licensing agreement that the University of Minnesota and Pepin Heights Orchard have struck over what's being touted as the latest and greatest apple to hit the market — the SweeTango.
The growers expect that the new apple variety created by U researchers will take a big bite out of the apples already on the market.
The growers who filed the suit argue the university's licensing agreement with Pepin Heights severely limits their ability to grow, sell and ultimately profit from the SweeTango, a cross between the Honeycrisp and Zestar varieties.
The growers complain that the deal limits the number of trees other orchards can grow and allows them to sell only directly to consumers or individual stores rather than through the wholesalers who are an essential source of revenue for most orchards. The deal also prevents smaller growers from pooling their crops to fill orders from large retail stores.
"Such restrictive limitations ... result in unfair competition likely to force some of [the growers] out of business and significantly impair efforts of other Minnesota apple growers to remain viable," the suits says.
The lawsuit points out that state funding was used to help develop the SweeTango.
University spokesman Daniel Wolter said Wednesday night that officials there are reviewing the lawsuit.
University officials say the more restrictive limits on the SweeTango are meant to maintain high quality standards that will better protect the long-term value of the product as well as provide revenue for horticulture research at time when other revenue streams are dwindling.
It was a lesson learned after the university debuted the Honeycrisp in 1991, ultimately earning a reported $8 million in royalties. The problem was that anyone could grow the wildly popular apple. Sometimes it was planted in areas that caused quality to suffer and the apple's reputation to decline, said Wolter.