The Business Herald’s markets and banking reporter.

Honey trade damaged as blackmarket sales grow

NZ producer calls for Govt action to curb blackmarket sales of Kiwi honey in China.

A number of New Zealand honey brands are being offered for sale on Taobao - China's version of Trade Me. Photo / Getty Images
A number of New Zealand honey brands are being offered for sale on Taobao - China's version of Trade Me. Photo / Getty Images

The boss of one of the country's major listed exporters, natural health products maker Comvita, says the Government should take more action to curb blackmarket sales of New Zealand honey in China.

His comments follow concerns raised by another business, Canterbury-based Airborne Honey, about unofficial sales of its goods on websites such as Taobao, the Chinese equivalent of Trade Me.

Airborne's John Smart said traders were purchasing honey at New Zealand supermarkets, shipping it to Hong Kong and then smuggling it into mainland China, avoiding a 17 per cent Chinese value-added tax.

The sales were damaging the company's business in China, as it was difficult to compete with the online prices, Smart said.

A range of New Zealand honey brands were on sale on Taobao yesterday, including Comvita, New Zealand Honey Co, Sweet Meadow and Signature Range, supermarket operator Countdown's in-house brand.

The Animal Products Act requires exporters of animal products, including honey, to be registered with the Ministry for Primary Industries (MPI).

Comvita chief executive Brett Hewlett, whose firm's products include manuka honey and honey-based lozenges, said it was "mum and pop" traders who were selling its products online in China and the law needed to be enforced.

"I think our regulatory bodies, the MPI included, have been sitting back and observing this," Hewlett said. "They know it's not good and they've known about these sorts of things for a long time but they seem very unwilling to get involved and impose some of the laws that are available to them."

Last year, Customs and the ministry launched a crackdown on illegal exports of New Zealand-made infant formula, most of which was going to China and being sold over the web.

The ministry did not respond to a request for comment last night.

Hewlett said the online sales were a challenge for Bay of Plenty-based Comvita as the products were being sold on Taobao for up to half the price of its official sales in China, where the company's Chinese agent operates more than 300 Comvita retail sites.

But he conceded that online trading, which was a global issue and not limited to China, was difficult to police and import authorities overseas also had a role to play.

Peter Cox, general manager of the New Zealand Honey Co, said the online sales of his company's products were not a concern and the traders were purchasing the honey from the firm's Chinese agents, rather than supermarkets.

The fact that online traders could sell New Zealand honey so cheaply, despite shipping costs and other expenses involved in getting the product into China, suggested the distributors and retailers selling through official channels were overcharging, said Bradley White, a Hong Kong-based Herald reader.

Sweet earner

$101.5mThe amount of honey exported by NZ in 2011
36 per centof exports were shipped to Asia
9450tonnes of honey were produced in NZ that year

Sources: Horticulture NZ/Plant & Food Research

- NZ Herald

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