Honey Marketing ‘Bodies’ in NZ

Organised (and Disorganised) Marketing of Honey

The marketing of honey in New Zealand for the twentieth century can perhaps best be covered in terms of a series of ‘era’s. These were the periods of time with a predominant marketing force. And generally there was a bit of ‘open space’ before the next attempt at organised marketing were made.

So long as New Zealanders were able to eat all of the honey produced, there was no real problem. The problems came from price cutting by sellers, particularly in a good production year.

“Organised marketing” came to represent a wish for a stable income, selling honey at a more consistent price from one year to the next, allowing for planning and growth. Over the century, there were a range of entities that took up the challenge: a true co-op, a private company, a government department, and finally a statutory authority.

For seasons when these ‘stabilising agents’ had the confidence of the beekeeper producers, they all, variously, operated effectively. But when beekeepers were not confident enough in the organisation, and supply quantities fell off, the organisations inevitably faced problems.

The eras this series of postings covers are

The NZ Honey Producers Co-operative Association (HPA), 1914-1932
NZ Honey Ltd,. 1932- 1938
The Internal Marketing Division (IMD), 1938-1954
The Honey Marketing Authority, 1954 – 1983

That ranges from about 1914 up until 1983, when the HMA was finally wound up, the last of any equivalent attempts at ‘organised marketing’.

The NZ Honey Producers Co-operative Association (HPA)

The HPA had its beginnings in Taranaki in 1914, a time when that region was rapidly growing to be a significant area of honey production for NZ.

Wm. Lenz, a big beekeeper from Masterton, had set up 450 hives in Taranaki several years earlier. When he decided to sell them off, there weren’t any Taranaki beekeepers large enough to take the lot – so they formed a co-op to buy the hives and distribute them in smaller lots! Several sideline beekeepers took the opportunity to go full time, adding to the growing beekeeping industry there.

The HPA started to provide a range of services for members – not only the marketing/sale of their honey, but foundation production, equipment importing, woodware making, contract extracting – a full range of services.

The honey was mostly marketed through a single agent in the UK. Advances (money paid on the honey before it got to the UK) were followed by a bonus payout to reflect the final, actualised price for the honey.

But even by, say, 1915 or so, New Zealand was producing more honey than the inhabitants would consume. It had to be exported, often at a lower price, else the local market would be flooded with supplies, prices would be cut and it all got worse.

But beekeepers did want some controls on the export sales – quality measures for the most part. And the Govt did listen, and created the Export Honey Control Board with powers to manage exports. Some beekeepers claimed the Board was obstructive and restrictive and should not be getting in the way of their doing business! It does appear that there was a lot of cross-over of people as HPA directors and also being on the Export Honey Control Board…

Through the early 1920s the HPA worked to establish a standard pack, a pack of honey that could be relied upon for consistent colour, flavour and general quality control. The result – the Imperial Bee honey pack – was quick to establish in the UK market, and remained the NZ honey “flagship” for many years.

The late 1920s clearly showed how much damage large crops of honey could do, wth price cutting being the name of the game.

Both the 1927/28 and the 1928/29 honey crops were some of the largest crops ever produced. While a good percentage of the country’s beekeepers were willing to supply the HPA with some of their crop, the best returns were from packing it and selling it at the door and locally. So that’s what the beekeepers, but the over-supplied local market almost immediately sent the price of honey to all time lows.

And remember – this was a time of economic depression generally…

The 1929/30 crop was the worst for 15 years – and it came on the heels of two record high production seasons. That low season gave the HPA time to get rid of some of the surpluses it had accumulated. Remember, beekeepers had already been paid advances on the honey – but the world was at a time of falling commodity prices and it was now achieving less than the beekeepers had gotten as advances!

Immediately prior to the 1932 NBA Conference, the HPA placed itself into voluntary liquidation. It had stabilised NZ honey prices to some extent for about 15 years, through some very rough world economic times. Ultimately, the HPA’s own members competing against it, especially on the local market, led to its demise.

Remember those over-paid advances that the HPA paid beekeepers? Well, that liquidity was provided to the HPA by the English agent. The debt went with the liquidated company – and the shareholder beekeepers for the next decade would bear the costs related to repayment of the advances…

So the Honey Producers Co-operative era of honey marketing – for much of the time with all the other services to production – lasted from 1914 to 1932.

NZ Honey Ltd.

The limited liability company that took over the activities of the HPA had a detailed contract for supply, one which probably wasn’t ultimately enforceable but was a deterrent to ‘playing the field’ between NZ Honey, local sales or sales to packers.

Many of the players were the same, several as ex-directors of the HPA, members of the Honey Export Control Board, President and Executive members of the NBA. It was a small industry, but seemed to have a lot of seats to fill, often by the same ones.

So NZ Honey, hand in hand with the Honey Control Board, set about to provide organised marketing as they saw it, with a mostly committed beekeeper supplier base.

But again, the scourge of the season’s production problem. In this case, it was a small crop problem for both 1935/36 and 1936/37 seasons. By this time NZ Honey had been operating for several seasons, with good results. They had begun to develop export markets, even for some of NZ’s darker honey lines.

And that was the final problem. NZ Honey and the Honey Control Board (with some cross-over personnel such as Percy Hillary, Sir Ed’s father) made a very unwise decision to buy some Australian dark honey. It was described as better than average, for the Australian honey of the day. But whether it was bought simply to transship to supply existing dark honey contracts (NZ Honey’s contention) or whether it was to be somehow passed off as NZ honey and be a major embarrassment to NZ Honey (Billy Bray was most vocal among other beekeepers).

Jack Butland (of Chesdale Cheese fame to come) was a major player, and provided some pretty dodgy answers and explanations on behalf of the Honey Control Board.

NZ Honey’s reputation was pretty tattered, and the resignation of all the members of the Honey Control Board (some of the same people) sealed the deal. NZ Honey, though it improved payouts to beekeepers over its 4 1/2 years of trading, did not appear to have the confidence of the industry by this stage. In 1938, the newly formed Internal Marketing Division took over NZ Honey’s plant and business at valuation.

NZ Honey Ltd’s era for honey marketing was from 1932 until 1938.

The Internal Marketing Division (IMD)

A Labour Government in 1938 quickly moved to fill the void caused by the failure of NZ Honey Ltd. The newly formed Internal Marketing Division (IMD) took over the plant and business of NZ Honey and set to the task of exporting the surplus honey, again into a troubled world market.

One feature of the IMD was the introduction of a Seal’s Levy, 1/2 d per pound of honey sold. NZ Honey had such a levy, but it could only be charged against that company’s suppliers, and not to all honey entering the local market. The Seal’s Levy wasn’t charged on honey sold ‘at the gate’ – so long as the container was not so large as 60 lb. But it was payable for any honey being sold at shops or sold to a packer.

The use of the levy money was described as either for advertising (to increase local consumption) or as a sort of stabilising fund, to encourage suppliers to the IMD – so that the honey that needed to get exported (to avoid local glut) would be, even if the price wasn’t as high as that in the local market. In later years, the same argument came up again – how should this money be used?

Though the IMD era was actually made up of two parts: before and during the war, and after the war. Toward the end of the war, the Govt introduced a controversial ‘conscription’ of 40% of the honey produced. The move was unpopular, and met with opposition and resistance – and the next year the Govt raised the requirement to 70% of honey to be supplied by the beekeeper to the IMD.

The argument was that the Govt said it wanted honey for such as hospitals and military and to supply to England, as well as supply the main city markets, which were not so well serviced by honey packers (with Christchurch a notable exception). Figures eventually showed that what honey was supplied was not prioritised and targeted as expected.

That period from the end of the war until 1954 had the beekeeping industry wanting to have a representative body to take over from the IMD. When the Minister finally made a decision in the late 1940s, he called for a representative from the NBA, 1 from the Honey Control Board and one from an association of suppliers to the IMD.

A lot of the differences of opinion came from the question of whether beekeepers and packers who pay the Seal’s Levy should be able to stand, or even vote, for members of a marketing committee? Then arguments about proportionality of voting, and several bits of botched regulations. One drafting error had an “and” rather than “and/or”, and it provided ongoing controversy in an already volatile industry…

By the early 1950s things had started to settle down – and an incoming National Govt told the industry that it wanted out of involvement in the handling of honey. The industry was quickly told to come up with a means of ‘organised marketing’, if that was indeed what the industry wanted.

The two part era of the IMD ran from 1938 to the end of the war, then the second part from then until the creation of the Honey Marketing Authority in 1954.

The Honey Marketing Authority (HMA)

Not long after a National Govt came into power in 1949 the signal to the beekeeping industry was clear – “tell us what you want, but we’re getting out of this entirely”. The Govt still wanted to be able to influence marketing policies, but didn’t want to own the honey packing plant itself. The industry agreed to the creation of the NZ Honey Marketing Authority.

Like several other efforts of those times, it took several attempts to get it right. The first version of the Honey Marketing Authority Regulations were so far from what was agreed that beekeepers were angry and offended. One example: one of ‘this must be part of it’ agreements, by all parties, was that the NBA would receive funding to act as the industry representative body. When the regulations came out, it was a “may” rather than a “shall”. The Minister swept all criticism under the carpet, and after several years, the HMA was operating as it should.

With the HMA formation, the Honey Control Board went out of existence, and the HMA took over full control of the export market. It had an agreement with Kimpton’s in England, the sole agent for the HMA, that the HMA would actively work to oppose exports by other beekeepers. It ensured that Kimpton’s had exclusive access to the NZ crop, and then only though the HMA.

The HMA, like the IMD and NZ Honey Co. and the HPA before it, had to suffer from variations of seasons, but also the variation in supply. If beekeepers thought they could get a better return by selling to a packer, there may be no loyalty shown to the HMA.

By the late 1960s, the supplies of honey to the HMA were diminished enough that it was becoming a real problem. The packing plant needed a certain amount to be economic. And then came a bad honey season on top of that.

In 1968, the HMA bought out three major honey packing operations in the South Island, to some extent ensuring a future supply of honey from the suppliers of those packers. But it brought the HMA more directly into direct competition with the packers, who felt it was not fair competition.

The HMA did still have the exclusive right to export honey, and that would be the downfall. By the 1970s, many beekeepers were keen to undertake exporting, but the only products allowed by the HMA were comb honey and packed lines of honey. That is, NZ beekeepers were not allowed to export bulk honey.

After the 1979 NBA Conference, where the desire to dismantle the HMA was quite clear, there were several years before the proceeds from the HMA – the packing plant in Parnell, stocks of honey and the equalisation fund – the Seal’s Levy money – became the subject of argument. Following arbitration, it was agreed that the fund should be used to benefit all beekeepers, not just the suppliers of the HMA.

And after several years of being loaned to a new Honey Co-op, that money became the Honey Industry Trusts that continue to benefit all beekeepers in the industry still today!

The HMA era lasted from 1954 until 1983…