marketing -

The History of
Honey Marketing
in New Zealand
Prepared and presented by
Nick Wallingford
What can we learn from
 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!
‘Better Beekeeping,
Better Marketing’
 A ‘mission statement’ for the National
Beekeepers’ Association for many, many
 Close relationship between the industry
association and marketing efforts
 Recognition that producing is not enough the return for the producer has other
 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
The early years...
 Honey sold into England in 1880s, but
irregularity of supply and speculation
 NZ’s best clover honeys were the equal in
 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
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
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
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
Early apiary inspectors
 WB Bray, Robert
Gibb, Isaac
Hopkins the
original three,
appointed in
Those famous bicycles –
really motorised? ...
Big crops, substantial
 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)
The moves toward
 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)
Co-operation started in
 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
 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
The National Beekeepers’
 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
Early NBA Conference
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...
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
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
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...
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
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
 By early 1917 some problems with
shipping space to England
The end of the War...
 In 1917 stocks on hand were shipped to
 Cheaper Australian and Californian honey,
along with cheap corn syrup, had created
consumer resistance
 Reduced buying power for English
 Some NZ honey in store had fermentation
Problems for the Bristol and
Dominion Producers’ Assn
 B & D had considerable stocks of HPA
 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
Conference 1918
Shareholders vs their
 Many HPA shareholders selling for shortterm 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
 By 1919 HPA calling up subscribed but
unpaid capital
The slide in prices...
 By 1919 price in England down to £100
per ton - half of what it was the previous
 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”
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!
Re-establishing an export
 AJ Mills and Co suggested as agent to
handle NZ honey in England
 Unsettled claims and counterclaims from
B & D’s liquidation ultimately cost
 Editor described beekeeper who did not
support the HPA or competed with it as
“a drone, a cheat, a traitor or a deadbeat!”
The ‘new’ Ruakura honey
house, 1923
The ‘bad years’...
 By 1923 honey was down to 4 1/2d per
 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
Good crops, even worse
 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
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
‘Better Beekeeping,
Better Marketing’
 PA Hillary began to
publish “The
Alighting Board”
 WB Bray began
publishing “The
New Zealand
Honey Producer”
July 1929
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
 Payout for 1929 only half of the previous
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
Christchurch Conference
The start of the 1930s,
the end of the HPA...
 PA Hillary elected President of the NBA in
 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
Who’s the boy?
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
1932 Conference
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
Trying to fix the bad
 NZ Honey required definite proportions of
 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
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
 Government advanced money to NZ
Honey to secure the goodwill and
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
Creamed honey...
 Dr EJ Dyce had patent right to the
processing of honey to create ‘creamed
 Rights were revoked in 1935 after the NZ
Honey Control Board took an action
 NZ Honey Control Board got two guineas
for costs...
Another knock...
 C and E Morton (HPA’s agents in England)
claimed £17,000 for overpayment of
 Governement agree to loan the industry
£10,000 to reduce the debt
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
 Honey Control Board and NZ Honey Co
wanted to maintain existing markets...
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
 NZ Honey Ltd ceased trading after 4 1/2
years, having increased returns from 4
1/2d per pound to 6d
The Internal Marketing
 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...
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
 IMD attempted to stabilise the returns to
 War brought more problems...
The new packing plant...
 IMD built a new packing depot in Auckland
 One half of total crop produced in the
Auckland province and two thirds of total
crop came from the North Island
 New plant required high proportion,
consistent supplies and support
 Aiming for all export and storage for
export, as well as the 700 to 800 tons for
NZ trade
And a bad season...
 Short season in 1937/1938, good one in
1938/1939, but 1939/1940 was one of the
worst on record
 Hardly any ‘carry over’ honey
 Pressure to obtain supplies for overseas
 Speculators operating...
Support for the IMD...
 Producer/packers urged by the IMD to
reconsider packing operations
 “6 1/4d per pound plus payout should
make packers reconsider”
 Opposition primarily from South Island
 Concept of ‘zoning of marketing areas’ giving IMD sole selling rights seen as
necessity by some
And another bad year!
 1941/42 was worst ‘since honey
production acquired the status of an
 GS Kirker remarked “By marketing their
honey independently of the Division while
good times continue beekeepers might
reap a harvest, but they will surely need a
marketing organisation at the end of the
war - and probably sooner if there is a
succession of bumper crops.”
Freezing of prices and
 1943 saw price and cost controls
 Internal prices to be divorced from export
parity, with excess to be paid into pool
 7d per pound pro rata was considered too
low a base price
The Marketing Scheme
 Compulsory supply of 70% of crop for all
beekeepers with 20 hives or more
 Remaining 30% could be disposed of by
the beekeeper
 Existing producer/packer facilities to be
utilised allowing for all the year round
work for those businesses
 Canterbury flatly refused - the ‘Canterbury
Controlled marketing...
 IMD claimed that from 1940 until the late
1930s the price of honey had not
depended on the size of the crop or
individual ability to ‘master the market’
 It depended entirely on some organisation
to take the surplus market off the local
market and obtain a good price on a
market built up overseas, often after
considerable effort
The failure to supply...
 The 70% acquisition expected 1,400 tons
 Only 760 tons supplied from beekeepers…
 IMD warned that the current high prices
and demand were solely due to the war,
and pointed to similar situation in England
in the early 1920s
 1944 brought same 70% ‘commandeering’
with required reporting, maximum
customer size of 5 pound tin
The end of the war
 1944 marketing plan to commandeer only
30 or 35 pounds per hive, approximately
50% of the crop
 Seals levy fund now stood at £17,000,
with £50,000 total reserves
 IMD still not being supplied with enough
for war requirements, supply of honey to
Voluntary supply
 War time regulations called for 70%
supply, but never more than 20% of total
crop ever used for war priorities
 Est. crop of 3,000, suggest supply 1,000
to IMD; half of remainder sold direct to
consumer, half to trade (with seals levy)
 This £5,000 to supplement bulk supply,
allowing payout of 8d per pound
 IMD was not being supported - 85 tons in
Another association...
 The appointed Honey Control Board (W
Nelson) a point of contention
 Honey Suppliers’ Assn formed to represent
those who supply the IMD which proposed
increased payout coming from seals
 Use of seals ‘tax’ change from advertising
to equalisation
‘Unique marketing
 Low crop, high consumer demand
 Front door selling in favoured areas of
entire crop in bulk direct to consumer
 Cancellation of sugar subsidy for
 Continued rationing of sugar to public
Control, responsibility for
 Honey Control Board was ‘advisory only’ to
the government; IMD decisions were seen
to be an imposition on the industry
 By 1947, call for a new ‘set up’ to exercise
measure of control, responsibility for
marketing decisions
 Early 1948 saw Honey Marketing
Committee (Field, Holt, Nelson) formed to
prepare for election of a producers’ board
Policy for 1949/1950
Pool account
Standard pack within NZ
No obstruction to private producer-packers
Ensure use of honey seals
Maintain and develop export market (aim
at 500 tons of Imperial Bee standard)
 Close liaison with Marketing Committee,
IMD and producers
Another complicating
 ‘Stabilisation’ following the war kept the
price of honey fixed
 Price Tribunal was loathe to increase the
price of honey in NZ, protecting the
 When prices were increased, it occurred
after tremendous effort and long delays
Alternative viewpoints...
 WB Bray: “Enable the producer to control
the marketing of his crop with a view to
freedom in association with other
 Wallace Nelson: “Need for confidence in
marketing organisation to ensure
adequate supplies of honey, with full
administrative responsibility over the IMD,
giving control to the producers”
1950: What the industry
 Organised marketing through central
packing depot or depots
 Contracts of supply from producers
 Simpler method of collecting levy
 Franchise for suppliers and contributors to
the Seals Levy on equal basis
 Seals reserves and revenue be
administered by the Honey Marketing
Executive of 1951
The Seals Levy...
 Set at 1/2d per pound back in the 1930s
 By the early 1950s it had not changed,
and was not providing the revenue
required to supplement payouts
 Still many claims of avoidance
Changes requested in
 Seals Levy to increase to 1 penny per
pound, purchasers (as well as suppliers)
should be eligible for nomination to the
Honey Marketing Committee
 The Honey Marketing Committee opposed
the nomination of seals levy purchasers
 Minister Holyoake appointed a purchaser
(EA Field) as the Government
Primary Products
Marketing Act, 1953
 Hand over to producers the marketing of
primary products
 Internal Marketing Division is abolished
 Benefit of existing government finance
 To pay due regard to general Government
trade policy
 Government representative to consider
interests of consumer
Attempt at subsidy...
 6,000 ton average crop, 4,500 consumed
in NZ
 1,500 tons required to export
 Called for government subsidy on seals
levy to acknowledge pollination value of
the industry!
 KJ Holyoake, Minister of Agriculture: “Nice
A new marketing
 A resounding ‘yes’ - 245 producers
(80,000 hives) yes, 15 (with 5,000 hives)
 Six member board: 4 elected producers, 1
appointed NBA representative, 1
Government representative
 First members: R Davidson, EA Field, WT
Herron, WW Nelson (with Executive
Director Williams the NBA representative)
Seals Levy retained
 There was little
disagreement that
a form of ‘internal
contribution’ to the
marketing body
was required
 Seals Levy
Kimpton Brothers...
 Appointed as agents to the HMA in 1954
 Sold over 2,000 tons in first year at a
steadily increasing price for all grades
 Returns close to local parity
 Colonel Kimpton said it was honey grading
regulations coupled with export control
regulations that made it possible
Southland beekeepers
Price Control
 After 16 years by 1957 Price Control
(ceiling price) had lost favour with
 Stability created by the HMA should be
able to set fair price
 Export bulk prices beginning to exceed
local packed prices…
 Same issue that announced decontrol
announced return to Price Controls!
Executive 1957
Veteran beekeepers, 1957
WB Bray (Leeston), AR Bates (Matamata), C Horner
(Te Aroha), A Pearson (Hamilton), TH Pearson
(Auckland), HC Wedde (Raurimu), H Geddes
(Rotorua), E Sage (Ohaupo)
The HMA debt
 The HMA in the late 1950s had a high
level of debt, and consequent low
confidence from beekeepers
 £100,000 debt after taking over from the
 New building in Parnell (after old IMD
building had rent increases)
 Request for government grant in lieu of
seals levy evasion
The HMA’s trading
 Overseas realisations were not as high as
the local returns
 Essential that several thousand tons were
exported to maintain local market stability
 75% of honey supplied to HMA was being
 Lack of Seals Levy plus low export returns
meant low payout meant decreased supply
Government investigation
 ‘Form a committee’
 Submissions from NBA, branches, HMA
and others
 Ultimately decided to move all the debt
over to Reserve Bank overdraft facilities
 Same facility that Apple and Pear Board
and Dairy Commission already had…
 Suggest increase in Seals Levy to 1 1/2d,
extend to all honey in retail containers
Change in representation
 NBA had member on HMA as of right; that
was lost
 In 1960 Wallace Nelson lost his position on
the HMA after 28 years without defeat
(back to Honey Control Board days). WB
Bray defeated, too (health reasons)
 Jack Fraser and Jim Barber, both NBA
Executive, became producer
representatives; George Gumbrell
Compulsory acquisition
 1961/1962 was below average season, but
1962/1963 was a good one
 Price cutting on top quality honeys
 Call for compulsory supply or several
restricted local sales-outlets for producers
 Darker honeys, especially, receiving low
 Light honey producers keen to sell
overseas on own account
The Kimton Agreement
 No exports to UK or bulk exports to any
other country
 Small consignments in retail containers
considered alright
 Light honey producers feeling that the
pool system was not giving them fair
 Percy Berry elected to HMA with promise
to terminate the contract
Acrimony and division...
 Public slanging through the industry
journal on merits of sole agent
 1964 election of Dudley Lorimer and Jack
Fraser indicated support for the Kimpton
Agreement and HMA policy
 ‘The alternatives have been categorically
rejected and the disruptive elements in the
industry have been summarily dealt with’ G Gumbrell, retiring Chairman
 P Berry defeated in 1966
And the small crops again...
 Two below average seasons, followed by
1966/1967 which was a disaster
 Conscious decision by HMA that the future
was in the export of bulk honey
 Distance from markets, competition in
retail sales, difficult markets seen as
barriers to change
 With small crops, though, the HMA wanted
to maintain the goodwill of domestic
‘Buyer of last resort’...
 Jack Fraser in 1969 described history of
the Seals Levy
 HMA bound to accept all honey offered to
 Processing, blending these honeys to raise
sales value would be a direct charge on
the pool
 Seals Levy acts as an ‘industry fund’
Executive (visit to
Wallaceville), 1969
The 1971 proposal
 President Bruce Forsyth proposed no Seals
Levy but a flat 2 cents per pound
producers’ levy
 Import distinction was producer to pay,
not packer
Changes to Kimpton
 Agreement with Kimpton’s changed from
12 months notice to 6
 Changed formula for calculating
 Sole agent for bulk honey, but packed
lines can be sold in their territory
And another committee...
 Committee of Government Caucus on an
Inquiry into the NZ Honey Industry, 1972
 Recommended HMA remain, but not
‘compete vigorously’
 Allow for exports without approval of the
HMA, levy proposed on the sale (not
production) of honey
 But 1972 conference voted against private
High overseas prices...
 By 1973, honey prices had increased
 HMA payout fixed by Government at 20
cents when HMA wanted to pay out higher
 Government wouldn’t let HMA increase
domestic honey price, either
Executive, 1973
Changes to the levy
 HMA wanted extension of current scheme,
paid by packers on containers, with more
enforcement powers (the ‘Ecroyd scheme’)
 NBA wanted extension to full producer
levy, based on declarations (the ‘NBA
 But by 1974, NBA membership moved to
favour a ‘hive levy’...
Rising costs, pegged
 HMA unable to include increases in
production costs as justification for
increase in wholesale price of honey
 Government involvement in local market
pricing as well as (recently) price
smoothing of producer incomes
 Hive Levy Act provided for 5 cents per hive
stabilisation levy
HMA and private exports
 Retail packs, 10 tonnes or less, subject to
HMA approval
 Exports could not be allowed to jeopardise
the ability of the HMA to maintain a stable
domestic market and export
 by 1976 need for representation of all
producers in HMA decisions (P Berry
elected previously)
 Remits in 1976, 1977 and 1978 calling for
private bulk exports...
The HMA composition
 Two in favour of private exports, two more
desirous of HMA control, and the
Government representative…
 Late 1978, the deadlock was broken, with
majority in favour of private exports
HMA at 1979
 Financial position, inflation worrying
 Traditionally buying all honey offered, sole
right to export bulk honey - act as buffer
against high or low production years
 Funding system borne by the industry as a
whole and/or complete export control
 Conference decided HMA could restrict
honey to accept...
Stabilisation scheme
 With no Seals Levy, HMA operated a ‘base
price’ and ‘trigger price’ system
 Any realisation in access of the trigger
price would go to reserves
 Base price was used to determine ‘cost
price’ of honey for local market, so
packers were selling for less than they
could in bulk to the HMA!
New policy formulation
 Admin of export control to go from HMA
 SI operation could be only commercial
HMA involvement
 Control over exports still desired
 Centre for export control to be placed in
hands of ‘alternative body’
 Export control office should set minimum
export price
The Dellow report, the
Kay arbitration
 Outlined financial, political, administrative
and marketing structures necessary for
success of proposed Honey Marketing Coop
 Decision on who to benefit/how to handle
the HMA reserves
 Decision to loan funds to Co-op challenged
by injunction
 Arbitration led to a trust, the loan, and the
ultimate end of the HMA
Related flashcards


27 cards


24 cards


29 cards


18 cards

Create Flashcards