Hawke’s Bay Regional Council’s mānuka honey business makes dismal returns

A company producing Unique Mānuka Factor honey was considered a good investment by the Hawke's Bay Regional Council ten years ago.  (File photo)

Provided

A company producing Unique Mānuka Factor honey was considered a good investment by the Hawke’s Bay Regional Council ten years ago. (File photo)

Projected returns from a city council’s investment in a manuka honey business have proven to be extremely optimistic.

Hawke’s Bay taxpayers’ $ 632,000 put into a mānuka trial over the past decade – which is expected to earn at least 7% pre-tax per year – ended up costing them two-thirds of their investment.

The net return over the past 10 years has been less than $ 200,000, or what the Hawke’s Bay Area Council calls “very low returns – well below original estimates.”

The council’s High Ultra Manuka Factor (UMF) Manuka Honey) trial was a joint venture with Comvita and saw 136 hectares of council-owned Tūtira National Park, 45 kilometers north of Napier, planted with mānuka between 2011 and 2013 .

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Unique High Manuka Factor (UMF) honey has strong antiseptic and healing properties.  (File photo)

Provided

Unique High Manuka Factor (UMF) honey has strong antiseptic and healing properties. (File photo)

The objective was to demonstrate “the potential of mānuka honey as an economically viable soil conservation crop and to facilitate the return of slopes to native forest”.

Mānuka was seen as a “land-use change tool” that “offers very good financial returns in a steep mountainous country context”.

The plantation was to have a productive lifespan of 25 years, after which it would be largely successful through regeneration of native canopy species and then mature native forest. The council was responsible for the management of the plantation and the land, and Comvita for the management of the beehives and the harvest, extraction and processing of honey.

The council provided the costs under a request from the Local Government Official Information Act, but did not publish annual harvest reports “because our business partner believes releasing the reports would harm them commercially. “.

The honey was harvested during four late spring and summer honey seasons in 2017-2018, 2018-2019, 2019-2020 and 2020-2021.

Measurement of mānuka on a slope above Lake Tūtira in 2016.

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Measurement of mānuka on a slope above Lake Tūtira in 2016.

When the project was announced in 2011, council staff said the harvest would provide “a significantly higher yield than the advice it currently receives through a pasture lease,” and “the modeled yields suggest that ‘there should be a major failure in honey yields before investment. would be at risk of not meeting the advice a rate of return on investment (return on investment) of 7 percent ”.

The council said that “the initial income forecast for the plantation was made based on the best information available at the time, but the plantation being one of the first in the country, there really was no reference to it. from which to work “.

“We cannot share details of initial forecast or actual revenue due to confidentiality clauses in our contract, but actual data has been lower than forecast for each of the four harvest years to date,” management said. of the council’s forest management. advisor, Ben Douglas.

Douglas said that many factors affected the volume and quality of the honey produced.

Mānuka planted on a slope of Lake Tūtira shortly after it was planted about ten years ago.

PROVIDED

Mānuka planted on a slope of Lake Tūtira shortly after it was planted about ten years ago.

“Weather is the main thing, bad weather conditions affect both the production of nectar and the ability of bees to collect it and convert it into honey. Since mānuka honey only lasts about a month, prolonged bad weather conditions can have a big negative impact on yields.

“The 2020-2021 season was particularly affected by poor weather conditions during the crucial period leading up to flowering and the flowering itself, making it the year with the lowest yield to date,” said he declared.

The main challenge was the dilution of manuka honey with honey from other floral sources, especially clover.

“We have tried to minimize clover flowering by grazing just before and during the critical period, but with minimal success,” said Douglas.

He said the council would continue to work with Comvita “to better understand the variables affecting mānuka honey production in Tūtira and better understand the potential of mānuka agriculture as a land use option”.

THING

Comvita is a mānuka honey company founded in 1974 and listed on the NZX.

Douglas said the plantation was established when the manuka honey industry was taking off. Previously, mānuka honey was harvested exclusively from wild trees, and “this was one of the first attempts in the country to establish an economic unit of planted cultivars selected for the production of Mānuka Single Factor Honey (UMF). raised on an agricultural site “.

On the plus side, the trees had stabilized erosion-prone soils, reduced sediment lost to streams, sequestered carbon, and served as a food crop for other native species to regenerate, all while providing income. continuous through the sale of honey, carbon credits, and continued grazing (until shade from canopy closure stops grass growth).

Elna M. Lemons