Where Comvita goes, many beekeepers go, and when they cancelled supply contracts with beekeepers in 2021-22 it sent some out of business. A few seasons on, and casual buying from the mānuka honey exporter also appears to have been shut off, leaving honey producers “feeling sick” and some in tears. So, what response does Comvita have?
Note: Apiarist’s Advocate has elected not to name the beekeepers spoken to for this story.
“I’m starting to lose hope. I’m starting to feel sick,” says one North Island beekeeper about the state of their business.
Two years ago their relationship with Comvita changed. Told the agreement they had to supply mānuka honey to the exporting giant would no longer be honoured, they haven’t sold any honey since.
“I’ve managed to keep going for the last two or three years but, I don’t know, I don’t want to have to keep selling things to feed this business. I want to get out, but I don’t know how. You have to keep looking after the bees.”
The business was built around Comvita’s supposed need for mānuka honey, as were others.
“I know a lot of people went under or had to sell their whole business because of what happened with Comvita and their contracts. We also planted out acres and acres of mānuka to supply them with and that has cost thousands of dollars,” the beekeeper said.
They were told about a year ago by Comvita that they would be buying UMF10+ honey, but nothing has come of it. Others spoken to by Apiarist’s Advocate refer to a “buying freeze” with one saying “I haven’t sold anything in the last two years. It is always the same answer. ‘We have to wait until the new financial year, we are not purchasing now’. I get the feeling they get calls all day long.”
Comvita’s Position
Comvita’s struggles of recent are well known, with the publicly listed company’s share price having seen a 12 month price drop of 64% to $1.15 as of September 27. Then, on September 29 they reported a 12.7% decline in June 2024 year revenue to $204.3M, a net loss of NZD77.4m, and a 49.3% increase in net debt.
In an investor presentation dated August 29 and titled “Agility in Unpredictable Times”, the company stated they were now seeing “the benefits of unwinding the previous long term supply agreements and only acquiring honey as required”.
An Apiarist’s Advocate request for an interview with Comvita to address their relationship with beekeepers was met with email response only, from the marketing department.
“We ran a process of exiting long-term supply contracts that were not linked to consumer demand in market. Before this time, we were contractually bound to accept product regardless of changes in demand and, as a result, by the end of 2022 our inventory peaked at $146m. At the start of 2023, we step-changed our focus on delivering sustainable positive operating cashflows by optimising our inventory levels and have reduced inventory down from $146m to $134m by the end-June 2024,” the reply stated.
Despite not willing to front for an interview, the response claimed a desire to “work constructively with our industry partners for the good of the wider Apiculture Industry”.
The Bubble’s Burst
“I have literally had beekeepers crying on the phone to me,” says Logan Bowyer, owner of Mānuka Orchard storage facility in the Bay of Plenty.
While many supply contracts may have been shredded by Comvita over the past few years, some honey had still been sold to the exporter. Now, talk of a complete buying freeze is hitting hard again.
“They had lived in a bubble beyond the rest of the beekeeping world for the last few years and they have not had to talk to anyone about how bad the industry was because they have been selling honey to Comvita for up to twice the price as to what others are offered for manuka,” Bowyer says.
And the beekeepers the Advocate has spoken to corroborate that, with several saying Comvita’s prices, when they were buying, were superior to other offers.
“When they are down, the rest of us are down. When they are up, we are up,” Bowyer says.
Now, with Comvita’s buying gone quiet, there could be more businesses in jeopardy of folding.
“Some of the big names, who you would think are pretty set solid in this industry, are starting to question their future,” Bowyer warns.
“They are heavily reliant on pollination in the next few months to get them through. This announcement has come at the same time as spring kiwifruit work is ramping up, so there is a small sigh of relief. However, when that is done and the pollination cheque is in and it only equates to less than what it takes to keep a hive alive for the season, and it is not followed by an adequate honey sale, they will be looking at another hard year.”
A Recession Reaction
“Comvita were the forerunner in creating markets for a quality product and a quality price overseas and everyone else has traded off the kudos. And I have to say, they maintained high prices to the beekeeper for a very long time while everyone else was starting to cut them,” another beekeeper says.
However, In the year to 30 June 2024, Comvita’s revenue fell $29.9million on the previous year, a 12.7% drop. They put much of the loss down to an economic slowdown in China, Comvita’s biggest market, where sales have fallen by $20million. According to their August shareholder report, other contributing factors are “price competition in entry point segments of Mānuka honey”, “over supply from pre 2019 has created a glut of honey that exporters are discounting to clear” and “aggressive and unsustainable price activity from competitors in entry point categories”.
Comvita’s 2024 annual report features a four page Q&A with (now-former) CEO David Banfield and then-chair and now acting CEO Brett Hewlett. Amidst the long analysis of international mānuka honey markets, references to those people – the beekeepers –who supply the honey which Comvita takes to the world are near non-existent.
“Lastly, our 20+ year focus on building an industry-beating sustainable supply chain with apiary and forest development provides us with robust supply,” Hewlett is attributed with saying, before moving off the topic of beekeepers without so much as mentioning the word.
While beekeepers don’t appear to be front of mind for company leadership, with 17,000 of their own hives on the books, they still play an important role in a company which also owns 6300 hectares of mānuka forest across 15 sites. This, they forecast will provide half of their required honey production by 2030.
So then, what need for beekeepers to extend their supply base? There appears to be no need now and no promises coming from Comvita that there will be in the future either. It’s therefore no surprise that many of their former suppliers have abandoned the industry. Those who remain hold out hope that, despite the one-sided nature of their relationship with Comvita, the phone might one day ring again.
“I’d like to get away from them completely, but you just never know, so I need to keep the relationship,” one of the beekeepers spoken to admitted, adding “It’s scary because I am putting everything I have got into feeding this business. To run this business, over 1000 hives, imagine how much that is costing.”
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