Honey, they took the subsidy

Demand for mānuka is booming — so why have many producers dipped into Govt wage support?

There aren’t many bright spots in the economy at the moment but one of them is ma¯nuka honey, so why are companies involved in that sector applying for support from the Government’s Covid-19 wage subsidy scheme?

According to MBIE’s website, NZX-listed Comvita, the country’s biggest ma¯nuka honey exporter, paid 16 employees $103,984 from the scheme as of May 3.

In the South Island, Oha Honey, part of Nga¯i Tahu Capital and another of the country’s biggest producers, 129 employees were paid $906,818 from the scheme.

Several other ma¯nuka honey companies are receiving support, despite a bumper ma¯nuka honey harvest and booming demand, which producers say is linked to consumers being more health conscious in response to the Covid-19 pandemic.

About 95 per cent of New Zealand’s ma¯nuka honey production is exported.

The wage subsidy scheme is aimed at supporting employers who have been adversely affected by Covid-19, so that they can continue to pay their employees.

To be eligible for the wage subsidy businesses must declare that they have had a 30 per cent revenue drop due to the pandemic and that they will retain named employees for at least the duration of the subsidy. Comvita — the country’s biggest ma¯nuka honey exporter — after being in the doldrums for the last two years — has seen its share price more than double since announcing in March a strong lift in online sales.

Chief executive David Banfield said Comvita had taken up the wage support to cover employees based at its three retail outlets at Auckland Airport, Quay St

Auckland, and its head office outlet at Paengaroa, near Te Puke.

“As a result of no one coming through airports [we claimed] for the 16 people who worked for those three outlets that otherwise would have closed,” Banfield told the Herald. “This way around we can hopefully be in a position to re-emerge, once we get back to some kind of normality . . . to reopen those outlets,” he said.

The scheme had enabled Comvita to retain its staff and “hopefully” return them to active employment with the company.

While Comvita’s domestic tourism-based operations had clearly taken a hit, international demand for product had remained strong, he said.

The country’s second biggest exporter, Manuka Health, which employs 200 people in New Zealand and 40 abroad, said it had not sought support because the sector had enjoyed a strong season and a lift in demand.

“Our view is that the industry is doing very well,” chief executive Ben Boase told the Herald.

Manuka Health is now owned by Hong Konglisted Guoco Group, part of the Hong Leong Group, after being sold by Pacific Equity Partners in 2018.

Among the smaller operators, Abeeco had taken up $35,148 for five employees, according to the MBIE site. Jude Salisbury, managing director of online retailer ManukaHoneyofNZ.com — part of

Abeeco — said there had been hefty increase in online demand for product, particularly for the higher UMF grades, but that Abeeco’s wholesale operation had suffered. “Many of the ma¯nuka honey companies that we work with, where they have a poor online presence and [largely focused] on the inbound tourist market, are well down. “It’s only those with an online presence and those that have been able to actually get products to their destination where there’s been a big increase in sales,” she said.

Abeeco Ltd owns the Abeeco brand and ManukaHoneyofNZ.com, supplies skincare products to the inbound tourist market, supplying the likes of DFS, Arataki and Remarkable Gifts in Queenstown.

“Since mid-January we have done only 7 per cent of the wholesale business that we have done in previous years,” she said. Representatives from each of the ma¯nuka honey companies approached by the Herald were either unavailable for comment, or declined to comment.