Seller Beware – Predatory Honey Buyer Has Beekeepers Seeing Red

With beekeepers desperate to sell honey during a market downturn, predatory honey buyers are taking advantage and one South Island buyer has racked up millions of dollars in honey debts which are past due. Some of those caught out speak up about how it has left their businesses in the mire, explaining what they would do differently in future and how they believe honey buying practices need to be improved to protect all involved.

A South Island honey buyer has left beekeepers up and down the country out of pocket, still owing at least $1.7million dollars and with others having suffered payments that were years late in coming.

Dishonest honey buying is nothing new to the New Zealand beekeeping industry, with veteran beekeepers able to provide anecdotes of dishonest behaviour from years gone by. However, with the boom of the mānuka honey industry the cash changing hands – or not as the case may be – is now far greater than historically.

One South Island honey ‘buyer’ alone (who Apiarist’s Advocate has chosen not to name) is currently responsible for at least $1.7million in unpaid honey bills according to beekeeper reports, all at a time when beekeepers struggle to keep their businesses afloat during a mānuka honey downturn.

It’s that situation which the latest predatory buying behaviour is capitalising on, say several of those who have had honey collected from them, yet are being denied payment.

“A lot of beekeepers are stressed out and wanting to sell straight away,” explains one North Island beekeeper, owed more than half a million dollars from the buyer and who his considering legal action to try and recover it.

“The amount of guys I have talked to and this guy says the truck is coming tomorrow so they are rushed to get it on, thinking it is a deal worth hundreds of thousands of dollars, which they are desperate for. Then he doesn’t sign the contract or changes his tune, while the beekeeper is out of pocket.”

As well as that complete non-payment there are beekeepers up and down the country who say the South Island buyer has taken honey from them, without full payment and without honouring terms.

“The only reason we have kept dealing with him is he was the only one who has kept buying and offering good money for the honey,” says another North Island business owner who is also considering legal action.

“We have had problems in the past when it has been 18 months since the contract commenced before we were fully paid by them. Right now, we are still owed nearly $400,000.”

After supplying the company honey in 2022, Catlins Honey in Southland finally got their last payment in March this year, despite payment terms supposedly being over 12 months. Owner Grant Hayes says it left their business on the brink of collapse.

“We had to take out loans with the bank and extend all our mortgages right out. At that point we estimated he owed us half a million or more. We were having to pay interest on that at commercial rates, extend the mortgages, the whole works. The amount we have lost in interest and costs on all the money we owed has been horrendous, at least $120,000,” Hayes says.

“What really hurts is having to pay late filing fees and penalty interest to the IRD on money that you have not even received yet.”

Those effected share similar stories as to the modus operandi of the company taking the honey. Payment terms are not met, with the offending buyer often retroactively deciding the honey does not meet their requirements. No offers have been made to return the honey to the beekeepers though.

One South Island supplier was told four months after the more than half a million dollars in honey was collected that honey tests had deemed it not fit for purpose, so they would not be paid. Further investigation into the honey’s whereabouts by the supplier showed it had been blended with other honey before the testing took place.

“People miss payments, I get it, we work it out. But, when they say they are not paying me because my honey has caused a problem, I get pissed off because they are lying to me,” the North Island beekeeper in the hole for over $500,000 says.

While beekeepers have taken legal action against the South Island buyer, and more are preparing to do so, most have concerns that if they push these efforts to the limit it will result in collapse of the company “and then no one gets paid”.

What to Do?

While the behaviour of dishonest honey trading may not be a new occurrence, the size of the numbers are. That’s just one part of a changed industry says long-time beekeeper Philip Cropp, owner of Nelson Honey.

“Historically, if you got honey at a good price you didn’t dare say anything about it and if there was a bit of wax on top you just put it through a filter, a bit of rust on the drum, people didn’t worry. Now, buyers are getting more fussy. They pick up something that is wrong and complain about it,” Cropp says.

Given that environment, the North Island beekeeper half a million out of pocket believes honey buying practices need to change, to ensure fair trading.

Beekeeper Philip Cropp believes the honey industry needs a credit rating system to help protect honey producers from dishonest buyers, with one South Island honey buyer currently racking up huge debts to a range of beekeepers up and down the country.

“If you are genuine about buying a million dollars’ worth of honey, or even 50 grand, it is really the sort of situation where the buyer needs to meet you in person and go through the test results with you. We need to knuckle down where the passing of risk happens. It should be immediately upon receipt that they retest and weigh. They can’t come back and complain six months later,” he says.

He also believes swifter payment terms need to be used and “the bank-of-beekeeper” practice of many honey buyers should be recognised for what it is, as businesses like his are forced to pay for lending while they await payments for honey that left their control long ago.

“You should definitely put in a clause regarding if payments are missed there will be penalties,” says Jane Lorimer.

The New Zealand Beekeeping Inc president has long advocated for beekeepers and has learnt the hard way of the need for late-payment clauses, with her own Hillcrest Honey business having suffered at the hands of late payments from the South Island buyer.

“There were contracts drawn up by their company that we agreed to because they were better prices than others were offering at the time,” Lorimer says.

In Southland, Hayes believes the industry needs more standardised contracts, or at least clauses, to assist fair honey trading.

“It is about time we had a standard contract, including a late payment clause. I think that should be put to the honey buyers and have them asked, ‘don’t you think this is fair and reasonable? Yes? Then you will all adopt it no problem.’,” the Catlins Honey owner says.

“If any of us are delaying payment with another company we will surely have to pay interest on any money owed. So, why can’t they do that? We are already giving them free credit on our money while they are paying off the honey taken.”

However, even such clauses are not a guarantee for success. A North Island business owed nearly $400,000 says they have used them, and the interest is racking up due to late payments, and yet they still wait. All the while paying their own extended overdraft fees.

“A contract is only worth what you are willing to spend to enforce it,” Hayes points out. “You are better to know who you are dealing with,” he says, suggesting the alternative of “asking around”.

“Everyone should have a beekeeper or two who they know and can speak to about honey buyers. However, it doesn’t mean the two of them won’t make the same mistake,” the Southland apiarist says.

“You have to talk to people and see who they recommend and who they don’t, but a lot of people wont because, if you have a good buyer paying good money for your honey, you don’t want everyone selling to them otherwise you may not get that good money anymore.”

Perhaps beekeepers should be more willing to ask honey buyers for references, “like they are applying for a job, because it is a lot of money at stake,” Hayes suggests.

In Nelson, Cropp believes a credit rating within the industry would be helpful.

“We have an agency up North that does credit ratings and if anyone gets behind in their payments with us we just send it off to them and they put it in their database. Beekeepers could start doing that, so they tell a firm of their honey dealings and we would know who is up to date with payments and who isn’t. A credit rating, and beekeepers could choose who they want to deal with,” Cropp says.

Many of the beekeepers effected by the South Island honey buyer have been communicating with each other, but it is already too late for many as overdrafts and loans rack up and future payments look at severe risk of never landing. While the money side of the dealings is troubling, the time and pressure of dealing with an unsavoury trade is also telling.

“It’s like dealing with a 12-year-old,” one put-out beekeeper says, while several others owed money have been riled upon learning that the honey buyer with big debts has been travelling the world with his family.

Hayes says his years of chasing the honey buyer saw a range of staff at the company get thrown in between. “No one can talk to him. He is insulating himself from talking to anyone, until he wants to do a deal.”

And that goes to the crux of the issue, there may still be deals to be had as beekeepers clamour to sell their honey, and without stricter controls in place predatory trading could easily continue. Even Hayes, whose business was pushed to the point of breaking over several years, says he would still make a deal with the buyer, so as not to cut off his nose to spite his face.

“My job is to sell honey. I potentially would sell to him again,” Hayes says. It would be forgiving, not forgetting though, as he adds “It would certainly be cash up front”.