Bay of Plenty honey and health products company Comvita has signed a Memorandum of Understanding with Australia's leading honey marketer Capilano Honey to form a new 50-50 joint venture apiary business.

The new business is purely a supply agreement and both companies will share the output of the honey, said Comvita chief executive Scott Coulter.

"We've been running apiaries in New Zealand for some years and we've got a lot of know how and Capilano know all of the beekeeping landscape in Australia," he said.

The new joint venture plans to operate a number of Leptospermum honey- producing apiary businesses in Australia.

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Comvita and Capilano each market honey and manage apiary operations that produce Leptospermum honey.

In an NZX statement, Capilano said it wished to expand its specialised Leptospermum apiary operation in Australia and secure greater honey supply. Comvita, which currently has sales and marketing operations in Australia, said the new venture would allow it to secure greater volumes of Leptospermum to meet demand.

The two companies have already been involved in a joint research initiative to investigate the medicinal properties of Australia Leptospermum honey.

"In order to best satisfy growing sales, both companies recognise the need to expand their operations and grow the supply base for premium honey, especially in Australia," the NZX statement said.