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  • Writer's pictureBilly Mulcare

Dealing with MPI – A Small Business Perspective

APIARIST’S OPINION: BILLY MULCARE

Few of us would dispute that our industry is going through difficult times. No matter where we sit in the supply chain (beekeeper, processor, marketer), if you are a small honey business and not well diversified, then life is not easy.

Billy Mulcare, a partner in Taitokerau based Kāre Honey, has recently cancelled their RMP registration in the face of rising compliance costs which are unsustainable for their small business.

As a small business operating in this difficult environment, we had already cut every ounce of non-essential expenditure. We are now looking long and hard at our RMP and MPI compliance costs. The export levy of $2,951 (incl GST), coupled with the semi-annual audit costs, brings the cost of our RMP to approx. $5,000 p.a. Is it worth this for us? No, I’m afraid not.

Crippling Bureaucracy

MPI’s export levy increase of 150%, coming as it does on the back of a pandemic, may arguably be construed as price gouging.

Many in our sector have lobbied local MPs and Ministers regarding the Ministry of Primary Industries (MPI) and their failure to listen to the beekeeping industry. But nothing changes. MPI as a Ministry pay lip service only to consultation with industry and their Treaty partners.

MPI Executive Management and the Ministers in charge of MPI have allowed this organisation to run without sufficient imperative to budget correctly and adequately control expenditure within their organisation; and to then arbitrarily pass their accumulated overspend on to industry members in a manner that is manifestly inequitable.

Essentially, they have invoiced small honey businesses to subsidise the large players. Because it is easier.

Jenny McEntee, partner and operations manager at Kāre Honey, with some of the niche products produced at their small processing facility in the Bay of Islands.

David vs Goliath

While MPI concede ‘that there is significant merit in moving to a 'volume based levy’ they have still seen fit to take a one-size fits all approach to passing on the overspend, by charging a levy per operator irrespective of size or production. This, at a time when small operators are experiencing extreme financial pressure, hardship and likely deteriorating mental health.

According to the data in MPI’s 92-page document ‘Stage 2 Cost Recovery Impact Statement’ 2022, the Ministry acknowledge by electing to pursue an operator levy as opposed to a per-tonne levy for the current year that:

  • Small honey businesses producing or selling less than 2.5 tonnes p.a. are being overcharged $2,500 p.a.

  • Small honey businesses producing or selling less than 25 tonnes p.a. are being overcharged $1,600 p.a.

  • Larger honey business producing or selling 250 tonnes p.a. are being undercharged more than $9,200 p.a.

Small businesses are the backbone of the New Zealand economy and have been the lifeblood of our industry. It is difficult to fathom why they are being penalised in this manner.

Rocket Science

MPI have stated that they will be looking to switch to a per-tonne levy in the next year or two. But too many of us have listened to MPI Executive’s superficial assurances in the past to now trust that they will actually do the right thing.

Equine Manuka, one of several animal wound care products developed at Kare’s RMP facility which had allowed them the space for innovation and value adding to honey, but will now not be available due to unsustainable compliance costs.

I acknowledge that additional work is involved in switching to a volume based levy. Certainly, it’s not as easy as simply dividing your overspend by 300 operators and sending out an invoice. (Which begs the question, why did it take eight months after the clock has started ticking on the 2022/23 annual levy to send out a formal invoice?).

Charging based on volume is not rocket science though. For illustration, MPI’s current rough estimate of a per-tonne levy for bee export would be around $47.20 per tonne of honey exported. If you exported two tonne of honey between 1 July 2022 and 31 June 2023 then your export levy is $94.40 for the year. Not $2,566.08. Not rocket science, but far more equitable.

MPI - Stifling Innovation

Is there an alternative to being an RMP holder for our business? Well yes, but it is not for everyone and regrettably it comes at the cost of innovation and new product development.

We have cancelled our RMP and will revert to our earlier business model which worked something like a bee hive. Our core business (mānuka honey for export and gift markets) remains unchanged. The key is collaboration and co-operation. We never felt the need to control our entire supply chain. Rather than set up competing hives and production facilities we always worked closely with friends who are beekeepers and processors in our region.

The driver for setting up our own RMP production facility was it enabled us to readily develop new products and undertake small production runs for niche products. Essentially, our facility enabled us to innovate. We have always believed the key to successfully competing alongside larger honey businesses was to add value to honey (particularly lower activity mānuka honey) rather than as a commoditised product in a jar. We actually believe it is essential for our industry as a whole that new formats, new recipes and new uses are found for New Zealand honey if it is going to compete internationally as anything other than a commodity.

Our small facility enabled us to produce niche products such as our Super Honey range, our sampler range of mānuka honeys in small formats, animal wound care products such as our Veterinary Mānuka and Equine Mānuka in syringes. This year we had been working on a range of canine supplements with lower activity mānuka honeys as the carrier for other New Zealand bio-actives.

Cancelling our RMP and removing the time wasting frustration of dealing with an organisation that has lost sight of the fact that it is there to serve the public and industry has now given us a feeling of relief. We’ve made a stand on behalf of our business and other small beekeepers and we can maintain our core business.

But it is with significant regret and sadness that we hang up our number 8 wire.

Billy Mulcare is a partner and CEO of Northland honey business Kāre Honey, specialists in single source mānuka honey and hive products for both table consumption and wound care, operating since 2004.


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