Masterton honey company Watson and Son named the fastest-growing business in New Zealand this year remain unbowed despite hitting a speed bump.
The Court of Appeal in Hamilton on Friday dismissed a challenge by the company, also the largest exporter of active manuka honey in the country, which sought to halt the Active Manuka Honey Association from revoking its licence to use a UMF (unique manuka factor) rating system label on their product.
AMHA is an industry association of producers that manufacture active manuka honey products and is the owner of the UMF rating system label, which aims to define the level of unique antibacterial activity found only in active manuka honey.
The association sought to revoke the Watson and Son licence to use the UMF label after samples apparently failed to reach levels claimed on the label.
AMHA general manager John Rawcliffe welcomed the court decision on Friday and said the Watson and Son court challenge had sought to prevent the association "from making inquiries into labelling issues relating to UMF products sold by the company in the United Kingdom".
"Over the past year, the association has spent significant sums of money to employ professional investigators and take action to remove licence holders' rights to use the mark if their product was found not to be true to label," Mr Rawcliffe said.
Watson and Son business development manager Jono Scarlet said yesterday the court decision does not affect their export contracts and there would be no product recall.
Honey set down for international distribution is to be immediately relabelled, he said.
"It doesn't affect our ability to rate the product and therefore does not affect our ability to sell," Mr Scarlet said.
Watson and Son resigned from the AMHA in the wake of the court finding on Friday and are now awaiting the setting of a court date to "pursue substantive relief" against the association, Watson and Son solicitor Daniel Hughes said yesterday.
Mr Hughes said Peter Molan, who invented the UMF rating system, had given evidence to the Hamilton court that supported the Masterton company claim about variability in the testing regime.
Professor Molan has since dissociated himself from the association and the system.
"The four batches that were the subject of this court case, and were allegedly of lower UMF than the label on each jar, were a very small fraction of our product in the market," Watson and Son owner and scientist Denis Watson said yesterday
"It is worth noting that of the hundreds of batches we have put into the market, that have been the subject of intense scrutiny by our competitors, less than 1 per cent has been challenged and even some of those batches have demonstrated compliance," he said.
Mr Watson said the company decision on Friday to resign from the association was made because "we have no other choice despite our continuation of legal action".
"It's important to remember the substantive case has yet to be heard and that this is a complex commercial and scientific matter," he said.
"Nevertheless, we have almost completed development of a new standard for anti-bacterial measurement in manuka honey," Mr Watson said.
"We expect it to be recognised as a standard internationally and not just a trademark for a brand, and we anticipate it will be developed by or in conjunction with the Standards Association of New Zealand."
Mr Watson said the new standard will "shortly be brought to market" with the backing of Professor Molan, of Waikato University's Honey Research Unit, using the assay test used by AMHA, which was developed by Professor Molan, and will include his recommended improvements of which the association was informed but failed to incorporate in its system.
"All of our export clients are delighted with the steps that are being taken to improve the assay, remove its variability and establish a standard.
"We have spoken to them, and our current buyers are supporting our brand," Mr Watson said.
"We will soon be inviting other honey producers to participate in this standard, and we expect that, through its independence, it will become the leading and most reliable measure of activity in manuka honey for export from New Zealand."