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Thomas Clow

For Those Still Interested in the Honey Producers Co-op

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Proposed New Zealand Honey Producers’ Co-op

Where We Are At

 

You may or may not know, there is a grass-roots movement underway to set up a honey producers’ co-operative in New Zealand.  As the nexus of the movement, I thought I would let the wider beekeeping community know a little bit about what is happening, where we are up to, and see if you might be interested in joining the movement or maybe just helping in some tangible way.

 

Background

 

At Ceracell Beekeeping Supplies we are in regular contact with lots of beekeepers.  Since about the middle of last year we have been getting feedback that things were not as rosy in the industry as the public believed.  The messages of unhappiness, growing into despair, increased until in February this year it was very clear that many of our customers were really struggling financially.  The word was that many had not sold any non-manuka honey last season, and couldn’t sell any this season as well at any price.  And it wasn’t just new beekeepers feeling the financial pressure.  Third generation beekeeping businesses were reporting that their banks which carried them through last year and this year were balking at extending overdrafts.  The banks rightly were asking the question, that if you can’t sell your produce for two years in a row, why will it change for the coming season?

 

At Ceracell we advertise that we are here to “help beekeepers”.  Well it became pretty clear that right now “helping beekeepers” meant doing more than just selling them stuff.  In April, I organised a series of meetings throughout New Zealand with the objective of finding out if the problem was nationwide, and what could be done about it.  It is clear that the problem is nationwide. 

 

The problem in its most basic description came about because of the decade long frenzy surrounding manuka honey and the skyrocketing prices it was getting.  Until MPI brought in the manuka honey definition, much non-manuka honey was being blended into manuka to increase volumes of that valuable specialist honey.  As a result, the price of non-manuka honey got dragged up, and the inherent value of those other beautiful New Zealand honey varieties got ignored.  So now blending has stopped and because there has been a decade of no significant marketing overseas of non-manuka varieties, at best honey producers can get international bulk honey prices, if it can be sold at all.  But what to do about it?

 

In talking to beekeepers, the word “co-op” kept popping up.  “If only we had a co-op that could find overseas markets and build value-added brands, things would be better.  At least we would know our honey would be bought.  As it is, our usual private honey buyer won’t or can’t buy our honey.”  At the meetings in which I met with about 300 people, there was a genuine desire to work together and help each other.  The co-operative model which is widely used in New Zealand in the primary produce sector seemed to fill the criteria, so that was the starting point.  I got some help from Michael Sage, a partner in the law firm, Simpson Grierson, who has expertise in co-ops.  He brought on board a co-op experienced CA from the accounting firm, PwC, Justin Liddell.  John Bell, a former tutor at Taratahi College and former lecturer in marketing at the University of Otago has provided valuable advice as well.

 

What Is Happening Now?

 

During and shortly after running the nationwide meetings I asked for people to make a verbal commitment to starting a journey towards establishing a honey producers’ co-op or some other model that would provide these primary benefits:

 

1.      Build an organisation based on the ethics and morality of helping each other.

2.      Commit to purchase the member’s honey in good years and bad years.

3.      Build brands and market the honey overseas.

4.      Return the added-value proceeds to the producer firstly through better gate prices and finally through dividends.

5.      Provide price guidance forecasts so the producer can start their season with some idea of what they will receive for their produce at the end of the season.

 

There are many other benefits that a co-op can provide members, but these are the main ones that beekeepers wanted from their co-op.  We received that commitment from over 280 beekeepers and beekeeping businesses that together run over 113,000 beehives.

 

The conundrum is that building a business that can do the above would take a lot of money, and most of the people drawn to the idea are currently in difficult financial circumstances.  So what to do?

 

After a very in-depth and to the point meeting with our advisors, we came up with a plan.  Step one was to seek donations to set-up a trust.  The trust would be instructed to begin the detailed analysis of the business environment and the international honey market with a primary objective of creating a prospectus to put to potential members.  The trust, with the help of beekeepers on a steering committee would begin building the co-op, that is, the constitution and rules of operation for when it would be incorporated as a co-operative company.  The trust would also prepare a cogent application to ask the Government for significant funding to carry the business for a number of years until the members were financial enough to carry it themselves.  Based on their extensive experience Michael and Justin felt that the very minimum that the trust would need to do these things, was $100,000.  They also believed that a firm deadline to reach that goal should be set, because letting the issue drag on for many weeks without resolution would in fact cause the momentum that has been built with the goodwill shown by so many, to be lost.

 

So on 27 May I forwarded the documents provided by Michael, asking for donations from the 280 beekeeping businesses, looking for a total of $100,000 by 5 pm on 21 June 2019.  Those willing to help will deposit their donation directly into the Simpson Grierson solicitor’s trust account.  If the total isn’t reached by the deadline, all the money donated will be returned to the givers.  If and when the $100,000 is reached, the trust will be set up and we will start.  This would not necessarily mean a co-op would be established, as it would be necessary that significant other money would be needed, but the first hurdle would have been overcome.

Progress

 

Yes progress is sure and steady, and the desire for the co-op is as strong as ever.  Many have donated and some have donated a lot of money.  Will we reach the target?  I think it is a 50:50 call.  I do know that some beekeepers who desperately want a co-op are in such difficult financial circumstances that they truly cannot give anything.  Most of those that have given to date have given more on an individual basis than I would have thought possible.  Others have said they will be donating, but the finances are so tight that the timing of dispensing cash is critical for them.  Whether they can free it up by the deadline, time will tell.

 

You Can Help

 

The reason I am writing to the wider community of beekeepers is because these beekeepers, these people with children, and employees, need this co-op.  And I think the beekeeping industry needs this co-op.  On the weekend I had a chance to talk with a few of the 280, and I want to share with you an insight that Karl gave me.  He said the beekeeping industry will end up like the fishing industry if we don’t do something.  The fishing industry is now dominated by a few large New Zealand corporates and overseas corporates who own most of the quota.  The small commercial fisherman has been pushed out of the industry.  If these small to medium sized commercial beekeepers—family based beekeeping businesses—are allowed to fail, the beekeeping industry in four or five years will look like the fishing industry.  The opportunity for someone to start-up a one-person or two-person operation will be gone.  But with a co-op designed to be the path-to-market for the smaller operator that opportunity will always be there.  Big money doesn’t have to drive the smaller business out.

 

You can help, even if you don’t think you would ever become a member of the co-op, or if you think you can’t give very much.  You all know that one bee makes just one teaspoon of honey, yet each teaspoon one after another adds up to fill your drums!  If each bee looked on its own contribution as not being of significance, then nothing would get done and the hive would die.  It is all a matter of numbers, and the smallest of numbers makes a difference.  If you think that you’d like to help these folk in even a very small way get over the line, please email me direct.  I will then send you the necessary documents to make a considered decision about donating, and how to donate.  Remember the deadline, or maybe better to say the “start-line” is 5 pm 21 June 2019.  So don’t delay!

 

Thanks for taking the time to read this.

To get more information please contact bruce via email at bruce@ceracell.co.nz, Bruce will be able to forward you documents in order for you to donate and join if you so wish.

 

If you wish to still write questions please go to the already open thread on the forum. I prefer to have this as a notification and advisment thread.

 

Kindest Regards

 

Bruce Clow

For the Proposed New Zealand Honey Producers’ Co-op

For Each Other, For the Future

 

 

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