A mānuka honey exporter has fallen over owing $2.9 million to creditors, and is partly blaming the extended lockdown in China for its demise.
Last week, Waterstone Insolvency’s Damien Grant and Adam Botterill were appointed as liquidators of New Zealand Mānuka Apiculture (NZMA).
Founded in late 2016, the company operated as part of a wider group producing and selling mānuka honey for local and export markets.
After Grant and Botterill were appointed, NZMA’s finance company, Xceda Finance, pulled its support and appointed Thomas Rodewald, of Rodewald Consulting, as a receiver.
He was also appointed to the company’s majority shareholder, NZMA Holding. The company’s sole director, Tao Pan, is also subject to the receivership.
The holding company has an 82% stake in NZMA alongside Savaii Trustee, which holds 15%, and retailer co-op Health 2000+, which holds 2.5%.
Grant and Botterill wrote in their first report that the company had suffered financial difficulties due to poor economic conditions caused by covid-19.
A “substantial” order dispute and the effects of lockdowns, particularly in China – a key market for mānuka honey – had also contributed to its demise.
Following a statutory demand and liquidation application, the shareholder placed the company into liquidation.
NZ Gazette notices show the application was made by NZ Honey Group on January 19.
The liquidators’ report noted that total liabilities sat at just over $2.9m, with the total assets’ value withheld.
Meanwhile, secured creditors were owed just under $700,000.
Six parties, including Xceda, Pure Mānuka Honey, Central Honey NZ and First Honey NZ, held security against the company.
Unsecured creditors were owed $1.6m, with related parties owed about $460,000.
Grant and Botterill will be looking to sell inventory and collect receivables, and Rodewald will be looking into selling the fixed assets, the report said.
According to the Ministry for Primary Industries’ (MPI) latest situation and outlook report, released in December last year, export revenue from all types of honey was $455m in the year to June 20, down 6% on the previous year.
Over the same period, export volumes fell 11% to 11,320 tonnes.
That was on the back of honey harvest volumes increasing by 7% to 22,000t. The 2021/22 harvest was the fifth successive season that production was above 20,000t.
MPI’s report said mānuka stocks had built up due to those strong harvests and a fall in export volumes from a peak in late 2020.
“Industry reports suggest that the total mānuka honey stocks in storage currently exceed one year’s entire production,” it said.
While the United States is the biggest market for NZ’s honey, China is also a key market.
Early last month, China reopened its borders and dropped its zero-covid policy after strict rules had dominated the country for much of the past three years.
ASB senior economist Kim Mundy wrote in a note earlier this week that while the end of the policy is undoubtedly a positive development for NZ’s economy, with key commodity and tourism exports to be higher than otherwise, there are several reasons why China is unlikely to prevent the NZ economy from losing momentum over 2023.
Widespread weakness in NZ’s other major export markets will temper the positive influence of China’s reopening, she said.