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The History of Honey Marketing in New Zealand

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  1. The History of Honey Marketing in New Zealand Prepared and presented by Nick Wallingford

  2. What can we learn from history? • Maybe not a lot, but who knows? … • Recognise some of the trends, the repeating charteristics • Appreciate the features that seem to ‘act’ upon the industry • Don’t expect much - but maybe you’ll at least enjoy yourselves!

  3. ‘Better Beekeeping, Better Marketing’ • A ‘mission statement’ for the National Beekeepers’ Association for many, many years • Close relationship between the industry association and marketing efforts • Recognition that producing is not enough - the return for the producer has other influences...

  4. Overview... • Strong-willed individuals, high/low crops, attempts to control internal/external sales of honey • Early years, Honey Producers Co-operative (HPA), The NZ Honey Co Ltd, NZ Honey Control Board, Internal Marketing Division, Honey Marketing Authority • History of marketing, but also of the NBA

  5. The early years... • Honey sold into England in 1880s, but irregularity of supply and speculation • NZ’s best clover honeys were the equal in quality • Hopkins and Mulvaney sent 5 tons, but it granulated - adulterated with flour! • While honey in England was retailed at 1/6 to 2/- per pound in glass, NZ producers were only getting 3d or 4d per pound

  6. Instruction and Regulation • Isaac Hopkins, apiarist to the Department of Agriculture, established apiary at Ruakura Farm of Instruction • First honey house in 1906 costing £45 • First Apiaries Act in 1906

  7. Prior to the NBA • Not just a bunch of hobbyists, even then - crop of 32 tons in 1907 • Slowing working toward the elimination of box hives • Fletcher Branthwaite (Tai Tapu), took 10 tons to England in 1907 - later had remainder sent back to NZ

  8. The marketplace... • Most Auckland honey from Great Barrier Island, 2 pound tins, varying from pohutukawa to manuka • Well packed lines from the few commercial beekeepers in the Waikato - medium amber, strongly flavoured with pennyroyal and manuka • Southern North Island had J Walworth (Palmerston North) and William Lenz (Masterston) each with crops to 30 tons

  9. Early apiary inspectors • WB Bray, Robert Gibb, Isaac Hopkins the original three, appointed in 1907

  10. Those famous bicycles – really motorised? ...

  11. Big crops, substantial exporting... • 1909/1910 Canterbury had record season, with average crop 200 pounds per hive - Price cutting saw returns drop to 3d per pound and lower… • Total exports for 1912/1913 586 hundredweight (value £1,182) - by end of 1913 nine month sales were 1,690 hundredweight (value £3,293)

  12. The moves toward organisation... • Mr Hull, President of Canterbury Assn, suggested conference in Wellington in 1913 - proposing name of Federated Beekeepers’ Association of NZ • 1913 Canterbury formed a co-operative association to export honey • Department of Agriculture drew up voluntary grading regulations (based only on colour)

  13. Co-operation started in Taranaki... • In 1913 Mr W Lenz decided to sell his Taranaki holdings • Small co-operative bought bees and sold to members in lots, and acted as marketing operation • HW Gilling, HR Penny, AR Bates among the 8 members • Based around packing operation of HW Gilling in Hawera • No initial capital - deductions from payments for honey supplied

  14. The National Beekeepers’ Association • Value of honey production £50,000 when Hon R Heaton Rhodes opened the 1914 conference in Wellington • James Allan (Wyndham) elected President • Membership of 256, expecting to double in the coming year

  15. Early NBA Conference

  16. Major A E M Norton... • Managing director of the Bristol and Dominion Producers’ Association Ltd • Formerly Trade Commissioner in England for South Australia • Promoted branding by country and regularity of supply for continued sales • Offered to contract for 100 tons minimum, 500 tons maximum for three years, at 4d FOB minimum, 5d possible...

  17. The beginning of organised exports • NZ Co-op Honey Producers’ Association took up the contract • Increased authorised capital, accepted other shareholders • Grading regulations became compulsory, leading to increased exports, ‘respectability’ of the product, increased local prices

  18. Failure to supply... • By end of 1916 the HPA had several hundred shareholders • Exports fell 30 tons short of the required 100 tons • Major Norton and the B & D expressed concern, but didn’t try to recover damages • B & D substituted cardboard containers for glass in innovative packaging move

  19. The honey to England • Light and dark honeys accepted by B & D for sale into England • Lighter honeys sold in southern cities, darker sold in the north • Darker sold as ‘New Zealand heather honey’ until Agricultural Dept pointed out there was no heather! • “What harm could it do anyone to call it that” the Editor argued...

  20. Calls for co-operation • Late 1916 WB Bray called for co-operation • If the small crop had all been exported, local prices would have soared • Windfall for the non-HPA members • Urged HPA members to turn high local offers over to the HPA rather than filling them individually • “We want to ride in a motor car too some day”

  21. High prices, but problems with the B & D contract • Sugar under control in England, honey prices soared • HPA paid out 8 1/3 pence per pound late in 1917! • Crop estimated at 1,250 tons, with HPA advancing 4 3/4 per pound on the two grades • By early 1917 some problems with shipping space to England

  22. The end of the War... • In 1917 stocks on hand were shipped to England • Cheaper Australian and Californian honey, along with cheap corn syrup, had created consumer resistance • Reduced buying power for English consumers • Some NZ honey in store had fermentation problems...

  23. Problems for the Bristol and Dominion Producers’ Assn • B & D had considerable stocks of HPA honey • HPA had two seasons’ honey in stock, overseas market with low consumption depressed by poor quality honey still held by retailers • High prices for 1918 crop locally and for export…

  24. Conference 1918 (Wellington)

  25. Shareholders vs their Association • Many HPA shareholders selling for short-term profit outside of the organisation • HPA paying 9d for honey in June, but only getting 5 1/2d advanced, with the rest to come when the honey was shipped • HPA had 300 tons accumulated in shipping stores • By 1919 HPA calling up subscribed but unpaid capital

  26. The slide in prices... • By 1919 price in England down to £100 per ton - half of what it was the previous year • Returns to beekeepers revised down from £150 to only £75 per ton over a period of two months… • HPA advertised “Civil War in NZ” and “Outbreak of Hostilities - a Warning to the NZ Beekeeper”

  27. Troubles for the B & D... • 1921 the Bristol and Dominion Producers’ Assn Ltd went into voluntary liquidation • Considerable volumes of honey held both in NZ and England • 1920 crop marketed mostly to NZ, the US and Canada (because of bad crops there) • Americans and Canadians enforced a 3 cents per pound import duty!

  28. Re-establishing an export presence... • AJ Mills and Co suggested as agent to handle NZ honey in England • Unsettled claims and counterclaims from B & D’s liquidation ultimately cost £10,000 • Editor described beekeeper who did not support the HPA or competed with it as “a drone, a cheat, a traitor or a dead-beat!”

  29. The ‘new’ Ruakura honey house, 1923

  30. The ‘bad years’... • By 1923 honey was down to 4 1/2d per pound • Prices for Californian honey in London continued to fall with the failure of their co-operative association • HPA members told to quit as much locally as possible to try to let Mills and Co catch up on the backlog of honey • Call for board of NBA, HPA and Govt to supervise exports to England

  31. Good crops, even worse years... • 1927 had local market fully stocked, price cutting widespread • 1927/1928 crop one of largest ever, with 1,029 tons exported • Local market prices low, beekeepers just trying to get quit of it • NBA wanting to stabilise the local market before it was completely ruined

  32. The end of the HPA... • HPA only being used to dispose of honey, even by previously loyal shareholders • AJ Mills and Co worrying over the outlay to pay advances, having troubles with sales • Government agreed to £9,000 assistance for advertising in England • Schemes to control local marketing considered essential

  33. ‘Better Beekeeping, Better Marketing’ • PA Hillary began to publish “The Alighting Board” • WB Bray began publishing “The New Zealand Honey Producer” July 1929

  34. The ‘Contract Scheme’ • Attempt to get 75% of the 1,200 HPA shareholders to either sell through the HPA or at uniform price, uniform package • Hope that this could stabilise the local market, with 1/2 penny per pound of honey on advertising to increase consumption • Payout for 1929 only half of the previous season...

  35. And a bad season... • 1929/1930 honey season the worst for 15 years, probably only one third of the previous season’s record big crop - two record seasons, one disastrous season and a world depression… • C and E Morton take over as agents for the HPA

  36. Christchurch Conference 1931

  37. The start of the 1930s, the end of the HPA... • PA Hillary elected President of the NBA in 1931 • Proposal to extend the powers of the Honey Control Board to local market • Proposal to create ‘equalisation fund’ to encourage exports • In July 1932, HPA finally placed itself into voluntary liquidation

  38. Who’s the boy?

  39. And out of the ashes... • New Zealand Honey, Ltd picked up where the HPA left off, at a time when honey had dropped to as low as 2 1/2d per pound • Shareholders could be compelled to supply 50% of their crop to the company • NZ Honey came into being after failure of the honey crop and the failure of competitive open marketing

  40. 1932 Conference

  41. And that Seals Levy... • Wallace Nelson of Otorohanga first proposed the use of a ‘seal’ to be fixed to containers of honey sold as part of a marketing association • ‘Sealed honey’ would assure the public of superior quality and stability to the marketing organisation

  42. Trying to fix the bad spots... • NZ Honey required definite proportions of crops • Shareholders had to agree not to sell at less than the Association’s listed prices • Members fixed seal to indicate 1/2d paid levy on honey sold directly • While NZ Honey was selling the honey, it was still under the control of the Honey Control Board

  43. Imperial Bee brand... • Branding of honey as ‘NZ’ had resulted in consumer acceptance/confidence in the Imperial Bee label • Owned by the HPA up to time of liquidation • Government advanced money to NZ Honey to secure the goodwill and trademark

  44. Reasonable stability... • 1930s had local market price cutting, but a slow increase in export returns • Many producers saddled with paying back the over advances from the HPA • Payout up to 4 1/2d per pound

  45. Creamed honey... • Dr EJ Dyce had patent right to the processing of honey to create ‘creamed honey’ • Rights were revoked in 1935 after the NZ Honey Control Board took an action • NZ Honey Control Board got two guineas for costs...

  46. Another knock... • C and E Morton (HPA’s agents in England) claimed £17,000 for overpayment of advances • Governement agree to loan the industry £10,000 to reduce the debt

  47. The issue of ‘control’... • Commission of Agriculture held enquiry, concluding that there should be a single authority to supervise the whole of marketing (local and export), and a ‘pooling’ with payments by grade • 1936/1937 again one of those ‘worst crop years’… • Honey Control Board and NZ Honey Co wanted to maintain existing markets...

  48. The Australian honey... • Importers claimed the honey was never to be sold in New Zealand or blended with Imperial Bee pack • Intended only to supply as ‘manufacturing grade’ • NZ Honey Ltd ceased trading after 4 1/2 years, having increased returns from 4 1/2d per pound to 6d

  49. The Internal Marketing Division • Labour Government... • In 1938 the IMD took over NZ Honey Ltd’s business and plant at valuation • NZ Honey Ltd wound up, paying back all shares and capital and 6d per pound pro rata on the last year’s honey • All producers selling outside of the IMD to affix a stamp for 1/2d per pound...

  50. The basic problem... • By the late 1930s, beekeepers knew that high prices in a season of shortage were of no real use when prices fell to unprofitable level when crop was above average • IMD attempted to stabilise the returns to beekeepers • War brought more problems...