Capilano, supermarkets accused of selling fake honey
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Capilano, supermarkets accused of selling fake honey

A storm is brewing over how to make sure your honey is what it claims to be on the bottle.

By Adele Ferguson & Chris Gillett

Australia’s biggest listed honey company and some of the country’s largest supermarket chains face accusations of selling fake honey.

Testing at a leading international scientific lab that specialises in honey fraud detection has found almost half the samples selected from supermarket shelves was “adulterated”, meaning it had been mixed with other substances. The adulterated samples were all products that blend local and imported honey.

Capilano’s Allowrie branded Mixed Blossom Honey, which sources honey from Australia and overseas, and markets itself as 100 per cent honey, showed up as “adulterated” in the majority of samples tested.

Experts say adulterated honey was generally bulked up with rice syrup and beet syrup and other unidentified substances, which aren’t detected by official honey tests.

International fraudsters, often criminal gangs in China, produce the fake honey and sell it to unsuspecting suppliers at a higher price, making a fortune along the way.

“That’s why Interpol is interested,” said Phil McCabe, the president of the International Federation of Beekeepers' Association (Apimondia).

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Capilano strongly denied any issues with its products and criticised the type of test – known as Nuclear Magnetic Resonance – used to detect the impurities, pointing out it differed from the official Australian test.

“Adulterated honey isn’t honey at all,” Mr McCabe said, adding that the NMR test was the most accurate available.

“By and large [the impurity] is some kind of syrup that’s been converted to look like honey, it tastes like honey. Everything about it seems to be honey when in fact it’s just sugar syrup or something else … Consumers don’t realise what they are buying and eating isn’t honey.”

The results are set to ignite a storm over how honey purity is tested that will involve the federal government as well as local and international regulators. ALDI has already moved to pull an affected product from its shelves as a precaution.

Mr McCabe said he would refer the tests, obtained by Fairfax Media and the ABC and commissioned by top law firm King & Wood Mallesons, to Interpol for further investigation.

Horticulturalist Robert Costa paid for the controversial testing to be done.

Horticulturalist Robert Costa paid for the controversial testing to be done.Credit:Jason South

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Germany’s Quality Services International (QSI) lab was commissioned by the law firm on behalf of horticulturalist Robert Costa to conduct two types of tests of the sampled honey. One used NMR screening and the second used the official C4 sugar test.

A joint investigation by Fairfax Media and the ABC’s 7.30 into the honey industry was supplied a copy of the results from Mallesons. The law firm collected 28 blended and imported honey samples from supermarket stores around Australia, including Coles, Woolworths, ALDI and IGA and documented the stores, locations, brands and batches.

The lab tested eight Allowrie samples as well as IGA’s Black and Gold private label and ALDI’s Bramwell’s private label brand and detected adulteration in almost half the samples.

The tested honey products.

The tested honey products.Credit:Joe Armao

Using the NMR testing the results showed that 12 of the 28 samples tested, were not 100 per cent pure honey.

Four of the six IGA Black and Gold private label registered as adulterated, two of six ALDI Bramwell’s private label brands failed the NMR test and six out of eight of Capilano’s Allowrie budget branded bottles had adulterated honey when NMR screening was used.

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The same 28 samples were then tested using the official Australian test, C4, and all passed. There is no suggestion that ASX-listed Capilano’s eponymous brand of Australian sourced honey has any issue.

Capilano was sent a copy of the results. It vigorously denied that any of its products weren’t pure honey and rejected nuclear magnetic resonance testing as the best way to determine adulteration. It said Australian and international regulators “do not use this testing regime at all”.

Capilano, which hit the headlines last month when a private equity consortium lobbed a $200 million bid to buy the company, said it was 100 per cent confident its Allowrie honey, which is made using up to 70 per cent imported honey, was pure and that it wasn’t surprised by the results given the “weaknesses” in NMR testing as analytical method.

“We are incredibly concerned that they are being used in isolation of more robust analytical testing, given this is also the opinion of the Manufacturer (Bruker) and the two most reputable laboratories in the world (Intertek and QSI), one of which has conducted the NMR analysis. Our concern lies in the use of these results to create doubt and confusion over the authenticity of honey and how that could be used to mislead the public and consumers.”

Capilano said one of those weaknesses was that the test did not detect that blended honey from different regions was 100 per cent honey, something the German lab, QSI, vigorously denies.

Our concern lies in the use of these results to create doubt and confusion over the authenticity of honey...that could be used to mislead the public..

Capilano statement
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Capilano declined an interview but said in a statement it “stands by the quality and purity of all of our honey brands, including Allowrie which has never failed more stringent and appropriate testing by world renowned laboratories”.

The issue is not isolated to Australia, with the European Union, where most of the imports come from China, also fending off fake honey at its borders. According to reports, policymakers are concerned about what is thought to be the third-most adulterated product in the world with 20 per cent of samples tested by the EU failing to meet standards.

QSI’s chief executive Gudrun Beckh, who has been testing honey for almost 30 years, said she was confident in the NMR test findings and said if a sample showed up as adulterated it meant the honey wasn’t pure honey.

She said QSI had an extensive database and used various tests for testing honey but NMR was the most reliable. She said blended honey from different regions was tested regularly. QSI performs a variety of tests but Ms Beckh said the NMR was the best for testing impurities.

“NMR has been used for testing fruit juice for many years and for honey for more than five years and no other method for adulteration is approved by more than 10,000 samples worldwide with 100,000 verification measurements,” she said.

She said NMR screening can pinpoint country of origin and botanical origin of the honey and that in the tested samples it was the Chinese aspect of the honey was adulterated, not the Australian honey.

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Despite Capilano’s criticisms, there is a groundswell of international experts, academics and private companies increasingly relying on NMR as the test of choice for detecting fake honey.

Apimondia, the peak body for the sector internationally, recently said it would use NMR screening as part of its new honey competition rules.

Australia’s peak industry body, the Australian Bee Industry Council (AHBIC), also endorsed NMR, along with Australia’s second largest honey operator Beechworth. Some supermarket chains, including ALDI, have also started using the test.

Bees play an important role in pollination.

Bees play an important role in pollination.Credit:Jason South

Leaked emails from the AHBIC, of which Capilano is a financial member and has board representation, show it wrote to the Department of Agriculture and Water Resources in July requesting it review the way it tests honey ditching the old C4 test and moving to NMR.

The executive director of AHBIC Trevor Weatherhead said in the email to the department that “AHBIC would ask the department to change to the NMR test if it has not done so already.”

He said it was reported that suppliers that were adulterating honey were finding ways around the C4 sugar test.

“The NMR test has been found to be very effective,” Weatherhead said in an email.

At the AHBIC annual meeting a motion was unanimously passed which said the Honey Packers and Marketers Association of Australia “requests AHBIC to work with the Australian government to advise them that using the C4 sugar testing to detect adulteration of imported honey is inadequate and to implore them to urgently begin using the best available method (NMR) to test honey imported into Australia”.

Fairfax Media and the ABC also contacted IGA, ALDI, Coles and Woolworths about the results of the tests.

At 2pm on Friday ALDI temporarily withdrew the two products in its Mixed Blossom Honey range that QSI identified as “adulterated”. In a statement it said “adulteration is a serious claim, it suggests that additives or masking agents have been added to a product in an effort to bulk volume, reduce costs or alter the flavour profile.”

We are proud of our Australian and Mixed Blossom Honey range and evidence that suggests the quality has been compromised will be investigated in full force.

ALDI statement

It said ALDI would investigate the claims and if the investigations conclude that the product has been adulterated, it would permanently be removed from sale at ALDI and further actions would be taken with the supplier.

“We are proud of our Australian and Mixed Blossom Honey range and evidence that suggests the quality has been compromised will be investigated in full force,” the company said.

Woolworths said it treated the accuracy of product labelling very seriously.

“We will now work closely with our supplier to review the substance of the claims in detail before determining our next steps".

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Coles said it had deleted all Allowrie products from its shelves in July.

In a statement it said the decision followed a review of its range of honey products.

It said it was “proud to support Australian producers and the work of Australian beekeepers who do important work in pollinating plants and food crops all over the country. Our Coles brand honey is 100 per cent Australian.”

IGA said "All Black & Gold honey is sourced from a well known Australian-owned producer, and it meets the requirements of the Australian and New Zealand Food Standards Code. Production of the product is under the direct control of the Australian supplier."

Ben Goldsworthy of Beechworth Honey, which uses only Australian honey.

Ben Goldsworthy of Beechworth Honey, which uses only Australian honey. Credit:Jason South

QSI’s Ms Beckh said honey adulteration was a global problem. She said Chinese honey was the most problematic. She said adulterated honey was generally bulked up – or cut – with cheap syrups such as rice syrup and beet syrup and other unidentified substances, which aren’t detected by official honey tests.

QSI uses a range of tests, including official tests, targeted tests and NMR, and said the Chinese are constantly developing new tailored products to cheat the tests and sell them to unsuspecting suppliers.

She said Chinese retailers openly admit to charging more for honey tested under NMR.

“If you want to have a product for a low price, you get a product which you think is honey but it’s not honey,” she said. She said the Chinese industry offers honey ‘NMR approved’ for a higher price than other tests.

“This is a clear indication that NMR can detect much more than other tests,” she said.

Ms Beckh said it was a constant battle trying to keep ahead of the Chinese fraudsters – as well as some in Vietnam and Thailand – who find new ways to cheat the tests by tailoring new cheap syrups to avoid detection of the NMR tests.

The international fraudsters, often criminal gangs in China, produce the fake honey and sell it to unsuspecting suppliers at a higher price, making a fortune along the way.

“That’s why Interpol is interested,” Apimondia’s Mr McCabe said.

Capilano is confident in its supply chain and has spent more than $1 million on testing in the past two years.

“We have found our supply chain of Chinese honey to always meet our quality specifications which includes being free of adulteration,” it said.

According to PricewaterhouseCoopers estimates, food fraud, which includes honey fraud, is a $US40 billion ($55.6 billion) a year global industry.

In China, beehive numbers have increased by 6.7 per cent over the decade to 2016, but exports have soared by 200 per cent, said honey trade expert Professor Norberto Garcia, who has written numerous papers on the honey industry.

“The numbers don’t add up,” he said.

Professor Garcia said the protection of honey purity was not only a problem of food safety or food defence but a problem of food security due to the role of pollination in agriculture.

“It is about the capacity of countries to provide their own food.”

King & Wood Malleson confirmed it would send a copy of the test results to the Australian Competition and Consumer Commission (ACCC) on Monday.

Professor Allan Fels said the alleged breach should be investigated.

Professor Allan Fels said the alleged breach should be investigated.Credit:Alex Ellinghausen

Former competition watchdog chairman Allan Fels said the only way to clamp down on fake honey was to take action. He said it was a “bad” breach of the law that should attract the highest possible punishment.

He called on the ACCC to investigate the allegedly misleading conduct.

“The ACCC needs to give priority to anything involving food adulteration in the current era – especially the globalisation era – nothing is more important than food safety, food security and fighting food fraud which is quite extensive and quite profitable if people can get away with it,” Fels said.

Local honey producers, beekeepers struggling to compete with cheap imports and horticulturalists also demand action.

Robert Costa, a member of the Costa family, which set up the country’s biggest fruit and vegetable empire and exposed the Calabrian Mafia in fruit markets in the 1990s, is the man who bankrolled the honey sample tests.

Mr Costa said his concern as a horticulturist was that cheap imported honey was hurting the industry, which, in turn, would hurt the production of agriculture.

“If we don’t have bees to pollinate the crops, then we don’t have almonds, or fruit and veg,” he said.

He estimates that 65 per cent of agriculture depends on pollination by honey bees. “Bees and water are the two most vital ingredients for agriculture,” he said.

In the past decade, 25 per cent of commercial beekeepers and hives have left the Australian market, according to figures published in a research report by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). The report, published in December 2016 estimated there are 13,000 registered beekeepers across Australia operating over 448,000 hives.

Drought, disease and cheap imports are key factors behind the fall in overall commercial hive numbers.

The honey scandal comes as Capilano, which is 20.6 per cent owned by billionaire Kerry Stokes through his vehicle Wroxby Pty Ltd, is subject to a $190 million takeover offer from a private equity consortium including Wattle Hill and ROC Partners.

Over the weekend, another potential bidder emerged when a parcel of shares were bought above the share price at $21.

The speculation was that Bega Cheese was set to make a counter bid.

Capilano, which was founded in 1953, told the market that the private equity consortium “shares its commitment to the Australian honey industry and maintaining strong beekeeper relationships”.

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It said a key aim was to “drive expansion of brands in offshore growth markets, such as China.”

Until 2004, honey imports were banned from Australia, but severe drought conditions helped convince the government to open up the market. When it introduced imports, it agreed to test about 5 per cent of imported honey consignments under Imported Food Inspection Scheme, using the C4 test.

Beechworth Honey, Australia’s second-largest honey operator and a major competitor to Capilano, and fourth generation beekeepers, only uses Australian honey, despite pressure to import cheaper products to reduce costs and price points.

Beechworth managing director Jodie Goldsworthy said in 2004 when the company – and the industry – was in short supply of honey due to the millennium drought, she considered importing honey but believed the risks were too great.

“We looked at each other and said if we’re to import this honey we wouldn’t eat it on our breakfast table, so that for us meant importing honey was not a decision that was right for us.”

It was an expensive decision. The shortage of honey meant they couldn’t supply the products, which effectively cut the business in half.

In the long run it paid off and built credibility among beekeepers and supermarkets.

“Because of those unknown chemicals used overseas at the time, we decided there was a risk it could end up in the honey and it did. There were situations found both in Australia and around the world where those chemicals were found as residues.”

The silence has made it really easy for the frauds to go on unhindered. It’s time to speak up before it’s too late.

Julie Goldsworthy - Beechworth Honey

Again in 2014 Australia had a similar drought situation. Again Beechworth voluntarily deleted half its products from supermarket shelves in order to maintain 100 per cent Australian honey supply. “From a risk perspective we saw that the same risks still existed plus the significant additional risk of fake honey,” she said.

“We noticed this time around the tactic was to introduce secondary brands to manage the shortage … in which a blend of imported honey was used.”

Ms Goldsworthy is conscious of the proliferation of adulterated imported honey. But says what makes her saddest is that the consumer is blind to what’s going on. “As more and more of this adulterated honey takes over the market globally it’s a race to the bottom in order to get it cheaper and cheaper,” she said.

She said beekeepers of the world have largely been silent about the problem of adulterated honey for fear of hurting the reputation of the industry.

“The silence has made it really easy for the frauds to go on unhindered,” she said. “It’s time to speak up before it’s too late.”

Do you know more? Contact Adele Ferguson at aferguson@fairfaxmedia.com.au