Mānuka honey producers on both sides of the Tasman will want more public funding to escalate a contentious international court battle over whether any one group can own an entire variety.
Analysis: Nicola and Robbie Patrick are preparing to extend their small Tasmanian business producing manuka honey, to push into the lucrative UK export market. "We will obviously be looking at the opportunities that will be there," Nicola Patrick says. "With our hives, we are not big corporate players – in Tasmania we are family-run businesses. We will never compete as far as volume is concerned. We are more about quality at a boutique level."
Their company, Blue Hills Honey, may be a small operator – but it is challenges like these that are worrying a group of New Zealand mānuka honey producers. After a costly and damaging legal defeat in the UK this month, that opens the doors to so-called manuka honeys from around the world, the New Zealand group reveals it is seeking English lawyers' advice on mounting an appeal.
They're worried the rejection of an application to trademark the words "manuka honey" will influence other major markets, including China, Singapore, Europe and the US as they too decide whether the name of an entire variety can be owned by one group of businesses.
New Zealand's mānuka honey exports hit $400m in the past year. Australia's industry is far, far smaller – a handful of mostly Tasmanian producers selling an estimated $20m worth of honey.
The two honey groups are fighting a proxy war; behind them in the shadows are the New Zealand and Australian governments. New Zealand agencies including the Ministry of Foreign Affairs, Ministry of Business, Innovation and Employment, and Ministry for Primary Industries are all involved in the Mānuka Charitable Trust action, says representative John Rawcliffe.
Damien O'Connor, the Minister for Trade and Export Growth, expressed his concern. "New Zealand’s mānuka honey sector is important, both in terms of the sector’s potential to contribute to the growth of high value exports, and in recognising the cultural significance of mānuka for Māori," he told Newsroom this week.
Rawcliffe has indicated the iwi-led trust will need more funding if it is to appeal the UK trademark decision – which is likely to mean going back to both producers and the Government. "We know there are other honeys, they'll have a different flavor, they will taste different, they'll have different properties and from different species. And inherently, that is wrong. From a consumer perspective, that is a concern.
"This wasn't an anti-Australian, in fact it was positive. We were there for the consumer. Now that's a harder challenge."
The UK is the third largest export market for mānuka honey, after China and the US. But Rawcliffe said China and the US were both considering the same question, and would factor in the UK decision in their deliberations. "It's a set-back, I can't lie."
Rawcliffe would like to appeal the UK decision, and believed there were grounds to do so. "Legal counsel will tell me whether my assumptions are correct or not."
MBIE has already lent this country's producers $1.7m, through the Kānoa Regional Economic Development & Investment Fund, to pay its legal bills. That is money they're unlikely to ever pay back to the taxpayer, under contractual terms that forgive the debt if they lose their trademark bid.
"We are open to collaboration at this point with New Zealand but if this continues in this manner, that door will shut." – Paul Callander, Australian Manuka Honey Assn
Now, ministers and producers on both sides of the Tasman will be asked to decide how much more money they are willing to plough into court costs and lawyers' fees.
The decision for Regional Economic Development Minister Stuart Nash will be whether to gamble more public money on obtaining an international legal precedent that, thus far, has failed wherever it has been attempted.
Though countries and regions are legally able to protect brands that are named after geographical regions, like champagne, there is no precedent for trademarking an entire, naturally-occurring variety like mānuka honey ... even if the word is derived from the Māori language.
The initial $1.7m loan was part of a $5.7m funding package for the Mānuka Honey Appellation Society (the Mānuka Charitable Trust's predecessor) signed off by former Regional Economic Development Minister Shane Jones – he accused Australian honey producers of trying to steal what was indigenous to New Zealand.
Now, nobody wants responsibility for it. The question is whether the $1.7m is down the tube – or whether the Government will front up more money to continue legal proceedings.
Trade and Agriculture Minister Damien O'Connor was happy to discuss the importance of the mānuka honey industry, but referred Newsroom enquiries about the funding to Nash.
Nash, in turn, referred all questions to MBIE.
MBIE eventually responded late on Wednesday: "Provincial Growth Fund funding for trademarking Mānuka Honey was in the form of a loan," said communications advisor Don Rood. "As the possibility of further legal action associated with this trademark bid remains, Kānoa Regional Development Unit cannot comment further.”
It's likely that if the New Zealand Government invests more money in the trademarking action (which is also being fought in New Zealand and other jurisdictions) then the Australian Federal Government may do the same.
That is a war of the wallets that neither New Zealand's Mānuka Charitable Trust nor the Australian Manuka Honey Association is keen to discuss publicly, as it raises uncomfortable questions about whether such concessionary loans comply with World Trade Organization rules.
The legal stoush between Kiwi and Aussie producers is being framed as another pavlova, Phar Lap or Crowded House – but it's more nuanced. Australian Manuka Honey Association chair Paul Callander welcomed the UK Intellectual Property Office ruling: “This decision is the right decision and a fair decision."
The impact of the decision extended beyond manuka producers to the thousands of individuals and organisations engaged with manuka honey through research, logistics, manufacturing and sales. “The market is forecast to be worth $1.27 billion globally by 2027 and offers vast potential for local innovation and manufacturing."
The Australians argue manuka honey has been harvested, under that name, for more than a century – though in both countries, it was regarded as poor quality waste honey until scientific breakthroughs in the 1990s revealed its health properties.
"The term manuka has been used in Australia since the 1800s and the Australian industry has invested significantly for decades in manuka honey science, research and marketing. It would be deeply unfair – and financially devastating – to deny that reality.”
Callander acknowledged the New Zealand group had a right to appeal the trademark ruling. But his association and Valeo Foods, which owns UK producer Rowse Honey, had been awarded costs and would be pursuing them vigorously, he said.
New Zealand's Intellectual Property Office, which is expected to announce its own findings early in 2022, would be "looking very hard" at the UK decision, Callander said, and so too would other countries' trademarking authorities. "You would assume a sensible detailed legal outcome from the UK would carry some weight in other jurisdictions."
He would not comment on whether the NZ Government's concessionary loan complied with World Trade Organisation rules, "only to say that our government would not engage in a similar way".
He also declined to say whether the Australian association expected funding from the federal government. "We have increasingly strong support from all areas of our government about this, while not taking the same approach as the New Zealand Government.
"I would have thought after four years of applying to obtain a certification trade mark in multiple jurisdictions and not being successful, some of the stakeholders surrounding the Mānuka Honey Appellation Society must be starting to think a little more rationally.
"To apply for a certification trade mark over a common descriptive term is not a good precedent for any government to be pursuing as the ramifications of potential certification trade marks with our industries on the same basis is not good for anyone. It is wrong in principle and law as trade marks cannot be used to give producers in one country a monopoly over a common descriptive term."
What is clear is that the New Zealand v Australia framing has become entrenched, and will be hard for either side to walk back. "We have always sought collaboration but always been pushed back by the Mānuka Honey Appellation Society," Callander said.
"There are some amazing things being done in Australia that would benefit New Zealand collaboration – plant breeding programs for elite clonal genetics, research and development for new pharma, and medical grade products, commercialisation of new products.
"We are open to collaboration at this point with New Zealand but if this continues in this manner that door will shut."
Back in Tazzy, Nicola Patrick would like to see an end to all the court cases, so they can get on with producing and selling manuka honey. "The only winners out of all these legal cases are the lawyers," she said. "I don't like saying that, but it's whose pockets are the deepest. Hopefully common sense prevails."
