An Auckland honey producer has been fined more than $370,000 for adding synthetic chemicals to 14 tonnes of doctored mānuka products in what is the first case of its kind in New Zealand.
Evergreen Life Ltd was forced to recall 18 mānuka honey products in 2016, following suggestions it had used artificial methylglyoxal (MGO) and dihydroxyacetone (DHA) during the honey's processing stage.
The company and its manager, Tak Yoon Lee, who is also known as Hyung Soo Lee, were then prosecuted by the Ministry for Primary Industries (MPI), which initially laid 71 charges over allegedly adding synthetic versions of the chemicals.
MPI was alerted to the crimes by a whistle-blower.
Evergreen Life Ltd and Lee then pleaded guilty to seven total charges under the Animal Products Act, six of which were representative charges, over the illegal chemicals which were added to the altered honey during a 16-month period.
Today, both the company and its manager were sentenced in the Auckland District Court by Judge Eddie Paul.
Evergreen Life Ltd was fined $260,000, while Lee, who is also known as Jason, was fined $112,500 and ordered to pay court costs of $1500.
Lee had opposed the several media applications for the hearing, however, Judge Paul said "this prosecution is significant" and "undoubtedly has significant public interest".
He said the scale and magnitude, which involved some "14 tonnes of doctored honey", goes to the heart of the New Zealand honey industry.
Judge Paul said Evergreen Life Ltd and Lee used the additional synthetic compounds, which would naturally occur in the genuine products, to portray that they were selling high-grade mānuka honey.
He said there was an "obvious commercial advantage" to create the "adulterated honey" with the higher market price for mānuka,
"It is obvious this was driven by greed by Mr Lee and the company's part," Judge Paul.
Lee had taken over the day-to-day running of the company from his father, the court heard, but has since sold the organisation's assets.
Lee, the "architect" of the scheme, and his father are no longer engaged in the mānuka honey business, Judge Paul said.
The chemical DHA is contained naturally in the flowers of the native mānuka plant, which converts in the honey to MGO, giving the honey its highly prized anti-bacterial properties.
The chemical's levels are used by producers to grade the honey, along with the unique mānuka factor, or UMF.
Consequently the more DHA, the more MGO, meaning weaker mānuka honey can be sold at a higher price.
In December 2017, MPI finalised a scientific definition to authenticate whether or not a particular honey was New Zealand mānuka honey.
The rules were intended to give overseas regulators and consumers confidence they were getting genuine mānuka honey.
After sentencing, MPI's director of compliance Gary Orr said after receiving the tip-off from the anonymous whistle-blower in 2016, MPI investigators carried out an inspection at the Evergreen Life Ltd site in Albany.
"A recall of all affected honey was undertaken, including honey exported to the US, China, Hong Kong, Korea, Australia and Singapore," Orr said in a statement.
But there were no food safety risks to any consumers, Orr said.
"The adulterated honey obviously commanded a greater price in the market place. The company benefited to the tune of approximately $700,000 because of its deliberate and calculated fraud."
Orr said about 33 tonnes of non-compliant honey was destroyed and about 60 tonnes is still held by MPI, which is also likely to be destroyed.
"This case is not related to mānuka honey purity, purity tests, or other definitions of mānuka honey. It is about a specific and isolated case of calculated fraud involving honey adulteration for financial gain," he said.
"Mānuka honey is a major export product for New Zealand. Anyone who seeks to deliberately make false claims about honey that's being sold in both the domestic and international markets will pay a very high price if they're caught."
Last year, the Herald investigated a hive of crime which was hitting New Zealand's apiarists and honey industry.
MPI reported at the time that New Zealand produces between 15,000 and 20,000 tonnes of honey each year, depending on climatic conditions, which is shipped to almost 40 countries.
The value of New Zealand's mānuka industry alone was also estimated to potentially grow from about $75 million in 2010 to $1.2 billion per annum, according to MPI.
An increase in honey value, particularly mānuka honey, also appeared to be a key factor behind the rise in hive crime, mostly in the central North Island, Bay of Plenty and Northland, Apiculture New Zealand chief executive Karin Kos told the Herald in an earlier interview.
Mānuka's "liquid gold" reputation has also caused problems overseas and in the US honey industry.
In July last year, a class action lawsuit in California was filed against Trader Joe's for allegedly selling counterfeit mānuka honey which was labelled as 100 per cent pure.