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TE RUNANGANUI O NGATI POROU
A new commercial entity is being created with the vision of empowering Ngati Porou landowners to obtain a sweeter slice of the multi- million dollar Manuka honey industry
The modest, unpretentious manuka tree. Over the past two decades the reputation of this stoic East Coast native has undergone somewhat of an extreme make-over.
In the past manuka was considered by some as an impediment to Ngati Porou’s development – a scourge to be eradicated from the whenua of once productive land blocks. In recent times however this perception has changed dramatically, as the stock value of manuka’s public share price has climbed skywards. Whilst before manuka was often looked down upon as only good enough to be used for firewood, is it now being regarded by Ngati Porou economic commentators as “the new cool kid on the block”.
So what has caused this impressive transformation of East Coast manuka’s image? An explanation involves the following three factors: a break-through scientific discovery, the impact of globalisation and the humble honey bee.
The honey industry is big business. Last year according to the Coriolis Research report, New Zealand’s total honey export market was estimated to be worth $195 million. A major percentage of that total was made up from Manuka honey exports, and a large proportion of that Manuka honey resource was believed to have originated from the Ngati Porou rohe.
The demand for Manuka honey has grown rapidly ever since scientific research in the late 1990s provided evidence that honey sourced from Manuka nectar, contained a unique type of antibacterial activity. This activity was capable of treating “super bug” style infections, where anti-biotics and other medicines could not. A certification system ( Unique Manuka Factor or UMF) was also subsequently created to measure the quality and effectiveness of Manuka honey. From that time onwards global consumers, particularly in Asian and Europe- an countries, have created a huge market for Manuka honey infused product lines – everything from medicinal bandages to anti-aging creams to health beverages. It is no wonder that Manuka honey is acknowledged as the most expensive honey on the planet.
With the world wanting our miere, the major commercial New Zealand honey companies have recognised the potential of the Ngati Porou region to supply high quality UMF grade manuka honey to the international market. Our region also has an abundant supply of the Manuka resource, and the honey companies are well aware that Ngati Porou landowners are in control of the land where this resource is produced.
As a result a situation has been created which cynically could be likened to the days of the “Wild, Wild West”, when frontier prospectors went out in search of plots of land with the intention of exploiting mineral resources such as gold or oil. In contemporary times some honey companies, in their pursuit of “striking it rich”, could potentially be charged with the same claim. A substantial number of Ngati Porou land owners have allegedly been drawn into contracts, where they have received a minimal rental return in exchange for companies’ placing beehives on their whenua. Or alternatively been given an un-equitable share of the Manuka honey profits, in comparison to what the corporates have been collecting.
This modern day “Honey Rush” would be amusing to many Ngati Porou landowners who could easily recall a time when their “erosion prone, over-grown with scrub whenua” would not have caught the attention of big business. Manuka covered hillsides are now hot property to those with an interest in capitalising off the growing demand for Manuka honey products. This recent turn of events has led to the establishment of a new entity which will provide Ngati Porou land owners with the opportunity to move from being passive participants in the Manuka honey sector to active contributors.
The time has finally arrived when Ngati Porou can confidently say to the biggest players in the industry, “No more funny business. We’re now in the honey business.”
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Over the past two years Ngati Porou Holding Company (NPHoldCo) have been actively investigating opportunities to invest in the development of the Ngati Porou regional economy. NPHold Co is the economic subsidiary of Te Runanganui o Ngati Porou and is responsible for managing on behalf of the tribe, collectively owned commercial assets such as fishing and farming companies, property, and other investments. The manuka honey sector has been identified by NPHoldCo as an industry which they believe can help grow the economy of Ngati Porou.
To help increase Ngati Porou’s par- ticipation in this industry, NPHoldCo has looked into creating a new investment initiative, in collaboration with Ngati Porou landowners. The Ngati Porou Miere Collective, is the name of a new entity which will be owned and governed by Ngati Porou landowners, incorporations and trusts who join the Collective. NPHold Co’s role in the Collective involves setting up the commercial structure as a limited liability partnership, as well as becoming one of the shareholders through supplying land received from the Ngati Porou Treaty Settlement.
Allan Jensen, Chief Financial Officer for Te Runanganui o Ngati Porou has been involved with undertaking the groundwork to establish the Ngati Porou Miere Collective. He says the new entity will provide a vehicle for Ngati Porou to take back more control over the Manuka honey resource. “For many years the haukaenga have watched as honey companies come into the rohe at the beginning of each honey flow season, and then depart again a few months later with their trucks laden with boxes. A significant amount of economic activity is being generated from the Manuka honey produced on our whenua, but the full economic benefits are not being retained within our region. By working together to form a collective we can have a greater stake throughout the entire sector, and greater control.”
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John Hockey is the new Business Development Manager for NPHoldCo and has been working alongside Allan on the Miere project since the beginning of the year. He believes Ngati Porou has a fantastic opportunity to help ensure the profits made from the Manuka honey resource are kept in Ngati Porou hands.
“We have estimated that there are currently 20,000 hives being placed within our rohe, and the vast majority of these hives belong to external non-Ngati Porou interests. If there are 20,000 hives and say for example each hive produces 20 kilos of raw honey at approximately $20 per kilo, that adds up to $8 million dollars worth of profits. So what does that mean for the Ngati Porou economy? That means if we controlled the Ngati Porou Manuka honey resource, we could retain that $8 million within our area. And that’s just the wholesale side of things - from the tree to the bee and then to the drum. If we were to export our Manuka honey, and as a conservative estimate say that equalled 10% of the $195 million total that is currently being exported now, Ngati Porou could bank roughly $20 million dollars. Add the wholesale and export side of things together, and that’s nearly $30 million the Ngati Porou economy could be benefitting from.”
In March representatives from Ngati Porou Holding Company and Te Runanganui o Ngati Porou went out to talk to Ngati Porou landowners, trusts and incorporations about the potential benefits of setting up a Ngati Porou Miere Collective. Hui were held in Ruatoria and Tokomaru Bay, and during the meetings a presentation was delivered about the Miere pilot project NPHoldCo had done in conjunction with Ngati Porou landowners in the Matakaoa region.
This pilot was a smaller scale version of the Ngati Porou Miere Collective concept and involved 14 contiguous land blocks, comprising 9 forest estates owned by Ngati Porou Holding company, and 5 whanau land trusts: Awatere, Harakeke, Pohutu, Tarere and Taumata o Manu. The pilot was conducted over the 2014/2015 manuka honey season, and encompassed 2000 hives and 20,000 hectares within the Whakaangiangi and Kopuapounamu Valleys.
Victor Goldsmith, has been contracted as a consultant by NPHoldCo to help establish the Ngati Porou Miere Collective, and was involved in pulling the Miere pilot scheme together. Victor has extensive previous experience in the Manuka honey sector having worked for the dominant players in the industry. For the past three years he has been the project director of the Miere Coalition (a national Maori honey industry group) and last year led a delegation of Maori beekeepers, landowners, entrepreneurs and investors to China, Japan, Hong Kong and Taiwan to better understand the consumer demands and market opportunities of the Asian market.
Victor says the Miere pilot was a useful exercise in helping to work out the processes and principles which will be used to inform and shape the Ngati Porou Miere Collective. “We used a Land Agent to co-ordinate between the land- owners, bee-keepers and honey companies, and to draft up supply and access agreements. These agreements also stipulated that the bee-keepers and honey companies must supply information to the landowners that normally they are not required to provide. This included information like the placement of hives, quality and quantity of the yield, extraction data and the revenue made from the honey.”
“An important element of the agreements included the provision that land- owners had the option of taking the honey, and not the money. What this meant was that instead of accepting what the bee-keeper was going to pay them for placing their hives on their whenua, they had the option of owning some of the drums of honey that was produced, which they could then store away and sell at a later date. What most landowners don’t realise is that the UMF levels of Manuka honey have the ability to increase up to 50% over a 6 to 12 month period if stored in an appropriate storage facility. So for example if the honey extracted from your whenua has a UMF level of 10 and it’s worth $50,000, if you stored that honey away it could rise to a UMF level of 15 and be worth $75,000 in a year’s time. Some of the landowners involved with the pilot took that option, and are quite happy that their earnings from this year’s honey season have increased remarkably.”
Victor believes if Ngati Porou land- owners collaborated together they would be a force to be reckoned with. “Although each landowner would still retain the mana over their own whenua, as a Collective group they have the power to influence and achieve things they cannot do as individuals working alone in silos. Presently the honey companies play us all off each other- it’s the divide and rule strategy. But if we worked together, we could negotiate better contracts, buy our own hives, control who comes in and out of the rohe, enforce our own bio-security regulations. The potential of what we could achieve is unlimited.”
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The long term vision behind the Ngati Porou Miere Collective is to create employment opportunities for Ngati Porou people, and to operate across the value chain of the manuka honey resource – from land to brand, adding value all along the way from the tree to the honey jar.
Allan was a member of the Miere delegation that went to Asia last year, and says the group were amazed at the prices Manuka honey were being sold for in supermarkets. “A 250 gram jar of honey was valued at $300, that works out to $1200 per kilo. We all wondered to ourselves how much of that profit did the Maori landowners, who were probably the kaitiaki of the whenua that miere came from, receive?”.
“At the moment we are just getting a minimal revenue in return for our re- source. But eventually we want to be the bee-keepers, the hive makers, the honey processors, the marketers and the exporters. We want to build our own extraction plants and storage facilities, create our own manuka nurseries and employ our own food technologists and scientists. Although our first priority is to create better returns for the land- owners in the Collective, we see this as a win/win opportunity for everyone.”
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Among the final messages NPHoldCo want to communicate to Ngati Porou landowners interested in joining the Collective, is that they don’t want to displace bee-keeping operations if the landowners are happy with their current arrangements. John explains that although NPHoldCo’s preference is to work with East Coast bee-keepers, if external operators are used they must demonstrate a willingness to train local people. “We want to get the best returns for our landowners, and use the best commercial bee-keepers. There is only a small pool of Ngati Porou professional bee-keepers on the Coast, so our long term strategy is to grow the numbers of skilled bee-keeping kaimahi who can maintain quality standards and practices. Bee-keeping is a rewarding but challenging job, so for young people interested in taking this up as a career having a good work ethic and a passion for the bees also helps.”
Allan agrees with this sentiment and adds that Ngati Porou landowners have nothing to lose by signing up to the Collective. “Over the next few months we are recruiting landowners to join us for the 2015/2016 Miere season. We already have the 14 landblocks who were part of the Miere pilot, but welcome the wider Ngati Porou community to join our structure. Your whenua will never be at risk from this project, as the Manuka resource is already on the land, and you don’t have to invest additional resources. If people don’t feel it is working out for them, they can either go back to doing nothing or return to the honey companies they were dealing with.”
“We believe this Ngati Porou Miere kaupapa ticks all the right boxes of being environmentally friendly, creating intergenerational employment, having a wealth multiplier effect and lastly run by Natis for Natis. If you are interested in signing up please let John, Victor or myself know. If you are one of those landowners who are locked into a two or three year contact, that’s kei te pai. The Collective will still be here in two years time, and also in 20 years time.”
To learn more about the Ngati Porou Miere Collective please read the following articles originally published in the July 2015 edition of Nati Link.
