A Cult New Zealand Honey Is Causing Legal Problems in the U.S.
(Bloomberg) -- There’s been an unexpected wave of food crime in the first half of 2018. In mid-August, $98,000 worth of ramen noodles were stolen from a tractor trailer in Georgia. In Chile, a long drought and surging avocado demand has resulted in organized armed groups assaulting producers in broad daylight. To address rising theft, the country has appointed “guac cops” as well as its first avocado-focused prosecutor, Bloomberg reports. Theft of the fruit is likewise a problem in New Zealand, which has led to the installation of alarm systems in orchards.
Yet, New Zealand has an even fancier food that’s raising legal issues.
Manuka honey is the pricey sweetener with remarkable antibacterial properties—heralded for its ability to heal wounds and burns, aid digestion, and keep skin smooth. The dark, medicinal-flavored honey is produced from the manuka tree, which is native to New Zealand. It has been rising in popularity, particularly over the past six years, growing 33.5 percent from 2012 to 2016, according to QYResearch.
But its “liquid gold” reputation is causing problems inside the industry. In July, three people filed a class action lawsuit in Oakland, Calif., against Trader Joe’s for selling counterfeit manuka honey that had been labeled as 100 percent pure. The consumers allege that they paid a premium for honey that was 100 percent manuka but tested as being a maximum of 62.6 percent. The case, Moore v. Trader Joe’s, notes violations in New York, California and North Carolina.
Earlier this month, Good Morning America started an investigation into the product: The show teamed up with Sweetwater Science Lab to test a number of widely available brands to check purity. Even back in 2014, the New Zealand Ministry of Primary Industries revealed that only 1,700 tonnes (approximately 3.75 million pounds) of manuka honey were produced, while more than 10,000 tonnes (22 million pounds) of honey labeled manuka were sold.
One of the major players in the manuka honey market is Comvita Ltd. It’s the only honey listed on the New Zealand stock exchange, where it posted a $9.3 million profit for the year ending in June. In January, Comvita expanded its presence to 200 Costco stores in the U.S. and to warehouses around Canada.
Corey Blick, vice president of Comvita North America, keeps tabs on the amount of drama in the manuka honey world. “We talk about it every day,” he says. “Who would have thought honey would cause lawsuits?” He won’t comment on the Trader Joe lawsuit, but he notes that “whenever you’re seeing a low priced manuka honey out there, it raises reason for suspicion. It’s an expensive product to make, in terms of cost to goods.”
The prices of Comvita products range from $23 to $150. A range of numbers measure the UMF, or Unique Manuka Factor, a rating developed by the New Zealand-based UMF Honey Association. It’s an evaluation based on purity and quality, with grades that include 5+, 10+ and 15+. The highest-priced is the highest-strength: the 20+.
For Manuka honey producers such as Comvita, the problem is that they can’t manufacture enough to meet demand. It’s produced from bushy manuka trees that flower only a few weeks a year. “We turn down orders every single week. It’s frustrating,” says Blick.
The remaining product is precious.“I was at our warehouse, we had a pallet of our 20+ jars on the top shelf, and the driver looked a little shaky,” he recalls. “I said to him: ‘Don’t stress; it’s only the value of an Aston Martin that you’re working with.’”
Another notable manuka importer is Pacific Resources International (PRI). Chief Executive Officer David Noll began importing it to the U.S. three decades ago. “Manuka has attracted a lot of what I call scalawags,” says Noll. “Whenever you get a product that’s making money, the wrong kind of ingenuity kicks in.”
Earlier this year, PRI commissioned independent tests from Fera Science Ltd. in England to assess various Manuka honeys. Included among the brands that came into question in PRI’s study was Wedderspoon Organic USA. According to Noll, Wedderspoon is one of two honeys that Costco has discontinued. (But it’s still available on Costco’s Canadian website.) “Wedderspoon didn’t meet the requirements. I’m not saying their honey is bad, it’s just not a true manuka.”
Rebecca Remley, CEO of Wedderspoon Organic, says they use a different system to determine the authenticity of their manuka, one established by New Zealand’s Ministry for Primary Industries (MPI). “Wedderspoon strictly adheres to—and even exceeds—the MPI standard, and therefore is a true manuka honey,” she says.
Noll says he was approached by Costco to supply the chain with honey, as well as by Trader Joe’s. “Trader Joe’s came to me, but their focus is price,” he explains. They couldn’t make it work, in the end.
“I said, ‘If you can find manuka honey at that price, go for it,”’ he says. “The person who was supplying them with honey had to cut corners to make it work—and got caught.”
Comvita’s Blick doesn’t think the problem of counterfeit manuka will improve anytime soon. “The last two manuka beekeeping seasons were below average,” he explains. “There’s a reduction in crop yield. And the demand is only going up. That will drive the price up, too.”
Noll agrees: “There will be more lawsuits.”
©2018 Bloomberg L.P.