Comvita reports big jump in Manuka honey sales to US, China

Comvita is New Zealand’s biggest honey company and probably the worlds largest producer of Manuka honey.

Its latest financial results released on Friday (i.e 23rd Feb 2018) show that the company has returned to profitability, with big rises recorded in sales both into the USA and China.

Comvita’s results statement  covered trading across the last 6 months of 2017.

It showed a net profit after tax of $NZ3.7million on sales of $NZ83.6million.

This was a 45% improvement on the disastrous second half of 2016, when Comvita reported a loss of $NZ7.1 million on sales of $NZ57.7milliion.

CEO Scott Coulter said that the turnaround was driven by sales into the USA, where the company’s Manuka honey is now sold in Costco.

Sales into the USA totalled some $20million for the half year, compared to just $2million in the first half of 2016.

Chinese sales were also up strongly, although most of these are now being booked through a 51% owned joint-venture.

In Australia, sales jumped to $NZ17million for the half year, up from $NZ12million in the comparable period in 2016.

Surprisingly, despite the overall profit, Comvita’s accounts showed a significant cash outflow .

Net debt also increased in the latest half, which is also concerning.

However on the bright side, directors confirmed expecting a $17.1million profit for the full financial year.

However this may be affected by a forecast NZ honey harvest “slightly below that of an average year.”

Other noteworthy features of the results statement were Comvita’s positive outlook on the impact of the strict new NZ government standards for Manuka honey.

Coulter said that confusion about the standard had had some short-term impact in the market. However, in the longer term Comvita believes the new regulatory regime will open up a significant number of growth opportunities around the world.

In an investors presentation also released to the NZ Stock Exchange, Comvita said it expected the new standard to see a narrowing of the price difference between its UMF 5+ and its UMF 10+ Manuka honeys.

Presumably, it is expecting UMF 5+ Manuka honeys to become more expensive as the market adjusts to lower supplies.

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2018 is biggest Australian honey crop for ten years says Capilano.

“We anticipate this year’s crop to be the largest in over a decade.”  

So said Ben McKee, managing director of ASX listed honey packer, Capilano, last week when releasing the company’s latest profit result.

McKee said that the company was in good shape, although its profits were down slightly, to just under $6million before tax in the six months to the end of December 2017.

Overall sales, however were up compared to last year, and McKee said the company had been buying up stock.
ben mckee capilano

In fact Capilano has bought so much honey from Australian beekeepers recently that it now has a stockpile of more than 7,000 tonnes.

The company’s accounts show that it has borrowed around $2.5million to buy the stock, with short-term borrowings jumping to over $5million as at 31 Dec 2018.

Even so, McKee claimed “ïnterest-bearing net debt” was down slightly compared to the same period in the previous year.

And he said sales of the company’s non-honey products, including the company’s apple cider vinegars, almost double in the latest six months.

Intriguingly, he said that regulatory reviews had hampered the company’s marketing efforts for its new Beeotic product.

The product is the first honey in Australia to gain Therapeutic Goods Administration accreditation as a complementary medicine. Capilano clearly has high hopes for it, and not just in Australia.

Even though export revenues were stagnant, Capilano still hopes to grow its business in export markets, and particularly China.

McKee said that Capilano’s health and wellness products (like its Beeotic and Manuka honeys) are a good fit for Chinese honey consumers.

Indeed he said the company has been finalising a “renewed go-to-market strategy” for China.

Surprisingly, given how much Capilano has invested in its Manuka honey business, (including through a multi-million dollar joint-venture with New Zealand company – Comvita), McKee failed to mention the trans-tasman dispute over Manuka honey naming rights.

Australia and New Zealand Manuka honey producers are at loggerheads over the rights, with the latest developments including a draft UK decision to grant New Zealand producers exclusive rights to a certification trademark.

Confirmation of that decision would force Capilano to use a different name for its locally produced Manuka honey, both in Australia and in export markets.

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New Zealand Honey Co in trouble, creditors owed $NZ1.3million

Back in 2009 it was one of the fastest growing companies in New Zealand. Manuka honey exports were booming and the NZ Honey Co was prospering.

NZ Honey Co logoBack then the Dunedin based honey producer was all set for a big growth spurt – one of the UK’s biggest retailers, Waitrose, had agreed to put NZ Honey Co Manuka honey on its shelves.

But yesterday came news that NZ Honey Specialities Ltd, trading as New Zealand Honey Co., is in receivership, with creditors owed more than $NZ1.4million.

Iain Nellies from the Dunedin based Insolvency Management told the Otago Daily Times that he was in negotiations with a potential domestic buyer.

He said the negotiations might be concluded this week.

However it appears that the company was actually placed in receivership on November the 24th of last year.

And the first report to creditors distributed last week estimated that overall debt as at November 21st last year was more than $NZ1.3 million.

nzhoneyco productsAssets at that time, including export stock in the UK, were estimated as worth only $NZ511, 615.

So it appears that even if the company is sold, there will be a shortfall, and creditors have no chance of being paid in full.

It isn’t clear yet whether there are any Australian creditors likely to be affected.

It appears that the UK was the New Zealand Honey Company’s biggest market, although it also exported to Hong Kong, Singapore, China and South Korea.

However perhaps what is most interesting about the  demise of the company is speculation that it may have been triggered by the NZ government’s new official standard for Manuka honey exports

Posts at a New Zealand popular beekeepers forum – -have suggested that the company may be holding as much as 100 tonnes of honey it had expected to be able to sell as Manuka honey.

But the honey may not meet the governments new official export standard. And if it doesn’t meet the standard, it will have to be sold as normal honey.

That would mean selling at a much lower price, and potentially for much less than what the company paid for it.

If that is true then the NZ Honey Co is likely to not be the only NZ honey packer facing financial difficulties as a result of the new Manuka honey export standard.

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Australia's finest and rarest honey. From the Tasmanian Honey Company 750gms of pure Tasmanian leatherwood honey. $18.95 plus freight

ABC TV programme exposes dodgy claims by Manuka honey brands

Last night’s ABC consumer TV programme -The Checkout – aimed its sights at Manuka honey.  ( Broadcast on 6th Feb 2018)

It showed that some manuka honey brands have unproven therapeutic claims on the label.

Programme Presenter Zoe Norton-Lodge appears to be in the late stages of pregnancy.

Royal Bee brand of NZ manuka honeyShe was particularly scathing about claims on the label of New Zealand’s ‘Royal Bee’ brand of Manuka honey.

The label claims that the honey will improve and relieve the following symptoms. “Regular stomach ache, Gastric Ulcer, Cold & Cough, Pregnant woman, Burn & wound”.

Fair enough.

But our research here at has failed to confirm that the Royal Bee brand still exists, or is still on the market.

In fact, that wasn’t the only area where the Checkout’s segment disappointed.

For example it failed to recognize the significant differences between UMF and MGO ratings.

The show also failed to tell viewers that not all Manuka honey has innate non-peroxide actitivity.

Nevertheless the show’s main point, that the claims by some brands are not supported by science, is impossible to disupte.

Australian By Nature is a leading local brand. It  tells customers that its Manuka honey can treat “gastroenteritis and constipation.”

Australian By Nature manuka honeyBut, as Dr Nural Cokcetin a microbiologist at the University of Technology, Sydney, told viewers, there is little scientific support for claims that manuka honey continues to have therapeutic benefits after it is eaten.

Dr Cokcetin said that there is now no doubt that manuka honey is useful when applied topically, i.e. directly.  She added that most, if not all honeys, have always been known to have some pre-biotic effect.

However there is no scientific basis to claims that Manuka honey is a superfood that can cure, or even treat cancer, diabetes, stomach tumours or other internal ailments.

She said that if consumers are planning to use Manuka honey for topical treatment, it is safest to use products approved by the Therapeutic Goods Administration.

Personally, I recommend the book “manuka -the biography of an extraordinary honey” by Clive van Eaton.

Eaton’s book provides a comprehensive overview of the science on manuka. It  also details some of the well-documented and indisputable therapeutic results achieved with manuka honey in hospitals.

As for the ABC programme, I’ll respectfully disagree with its final conclusion. Manuka honey with greater potency and higher ratings is certainly more expensive, but that isn’t just because retailers are exploiting consumer gullibility.

Higher potency manuka honeys are rare, and more difficult to produce.

So the high price for a high-rating reflects the scarcity and short supply of that manuka honey, and not just its potency.

The show is now available to view via the ABC’s iView service, and should be accessible via the shows website in about a week.

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NZ govt standard for manuka honey comes into effect Feb 5th 2018

New Zealand’s new official standard for manuka honey exports is set to take effect next Monday February 5th 2018.

All NZ manuka honey destined for export after that date will have to pass the government’s scientific standards in laboratory testing.

The move should reduce the amount of fake NZ manuka honey being sold, when, in fact, it is either not manuka honey at all, or a blend of manuka and other types of honey.

A six month transition period will allow existing stocks of honey labelled as manuka to continue to be sold without being tested.

But after the six months has elapsed, all New Zealand honey labelled or sold as manuka will have to pass the test.

Even so, controversy over the test itself has continued, with a new version of the government’s scientific definitions released on Monday January 29th 2018.

The new version only affects manuka honey blends, or in other words, multi-floral Manuka.

Whereas the original version, released in December last year, set the same levels of methoxyacetophenone for both mono-floral (ie. pure) and multi-floral (i.e. blended) manuka honey, the revised standard released on Monday, reduced the levels of the chemical required in blends.

The revision followed legal action in the High Court by the NZ Beekeepers Association.

NZ Beekeepers had argued that setting the same levels of this chemical marker for both mono-floral and multi-floral manuka honey was unnecessary and inappropriate.

Russell Berry and his family, are the founders and operators of one of NZ’s oldest and best-known honey companies – Arataki.

He is also chairman of NZ Beekeepers Inc, operators of the forum at

Berry claimed that the original definition would exclude up to 500 tonnes and up to $NZ100million of multi-floral manuka honey from the market.

“It’s a pity that it took litigation launched by NZ Beekeeping Inc last week to get the government to act on the evidence before it, to protect the interests of New Zealand’s beekeepers, and the rural communities they live and work in,” said Berry.

Criticism of the government’s scientific definition has also been voiced because it is different from  the definition that was being promoted by New Zealand’s Active Manuka Honey Association, manager of the UMF trademark.

The AMHA had been planning to release a testing device, using fluorescence technology, that beekeepers could use to test their honey for the presence of key chemical markers in Manuka honey.

However the NZ government’s scientific standard uses different chemical markers from those identified by the AMHA as unique to Manuka honey.

Moreover the government’s standard includes a pollen DNA test as well as the four chemical markers.

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Australia's finest and rarest honey. From the Tasmanian Honey Company 750gms of pure Tasmanian leatherwood honey. $18.95 plus freight

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