‘Misleading’ macadamia nut products prompt legislation in Hawaii

A kamaaina firm that claims to be the most important vendor of chocolate-covered macadamia nuts has collided on the Legislature with native macadamia producers over whether or not Hawaii-branded merchandise containing international macadamias ought to say so.

Growers and processors of native macadamia nuts sought assist from lawmakers this yr to boost a state truth-in-labeling regulation making use of to what has been Hawaii’s second-biggest agricultural crop by worth.

The laws, Home Invoice 1348, would require disclosing the origin of macadamia nuts in merchandise bought within the state if packaging, together with phrases or photographs, means that the nuts are from Hawaii.

Over 100 proponents of the invoice, together with quite a few workers of macadamia farming and processing corporations but additionally the state Division of Agriculture and the Hawaii Farm Bureau, have urged lawmakers to move the measure.

However Honolulu-based Hawaiian Host Group — whose founders on Maui in 1950 are acknowledged as the primary maker of chocolate-covered macadamia nuts that established what the corporate calls “Hawaii’s present to the world” — could have derailed what it derided as faulty laws that may inflate the price of doing enterprise and result in larger shopper costs.

Richard Cohen, supervisor of the Division of Agriculture’s measurement requirements department, advised members of the Home Judiciary and Hawaiian Affairs Committee at a March 1 listening to that dominant macadamia snack producers had just about used Hawaii macadamias of their merchandise for many years, although in newer years farmers have grown extra involved with growing use of international macadamia nuts in Hawaii-branded merchandise.

Jeffrey Clark, an govt with a agency that owns Hamakua Macadamia Nut Co. and Ka‘u Farms Administration producing macadamias on Hawaii island, advised the committee {that a} shift by the main macadamia product maker to make use of principally international nuts, usually from Africa, has gotten so massive just lately that a lot of the native crop goes to waste and prompting farmers to get out of the enterprise.

“We have to defend the business, defend these farmers,” he stated.

Proponents of the invoice haven’t publicly singled out Hawaiian Host because the invoice’s goal. However the focus
of HB 1348 undoubtedly is Hawaiian Host, which additionally owns snack maker Mauna Loa Macadamia Nut Co. and was acquired by buyers who rescued the corporate from potential chapter in 2021 as annual income plummeted round 30% to roughly $100 million because of the coronavirus pandemic’s impacts on Hawaii tourism.

Clark advised the committee that farmers have been those who established Hawaii macadamia nuts as a premium product, and that the business’s greatest producer is deceiving customers by placing cheaper international macadamias “in a Hawaii bag” to acquire a premium value at a low value whereas native farmers endure from diminished demand and deflated costs.

Man Ward, a small farmer in North Hilo, stated in written testimony that this yr he can’t promote his crop for greater than 80 cents a pound, which isn’t sufficient for him to make harvesting worthwhile and compares with $1.20 per pound in previous years.

“The portion of the patron greenback that goes to the farmer is so small that being truthful in regards to the origin of the product and providing a good value to the farmer shouldn’t critically harm the processor’s enterprise,” Ward stated.

Brad Nelson, director of the Macadamia Growers of Hawai‘i commerce affiliation, stated in written testimony that thousands and thousands of kilos of nuts have gone unharvested this season and that growers are dealing with thousands and thousands of {dollars} in losses as a consequence of unsold or unharvested inventories.

In line with the Hawaii Farm Bureau, Hawaii is the fifth-largest producer of macadamias on this planet after Australia, South Africa, China and Kenya.

The newest U.S. Division of Agriculture report, from 2021, stated 620 Hawaii macadamia farms protecting 17,000 acres produced 51 million kilos of product valued at $62.7 million.

In written testimony the Hawaii Farm Bureau stated native macadamia farming is below nice stress from financial and environmental pressures that embrace using international macadamias in merchandise representing Hawaii.

“One of many best threats to the viability of macadamia farming in Hawaii is the deceptive labeling of macadamia nut merchandise,” stated Brian Miyamoto, the group’s govt director. “At the moment, there’s little to no regulation to forestall using Hawaiian names and pictures to market macadamia nuts grown outdoors of Hawaii.”

Beneath federal labeling regulation, a requirement to reveal the origin of macadamia nuts on meals packaging applies solely to unprocessed uncooked nuts, based on the state Division of Agriculture.

Opposition to HB 1348 has fully or virtually fully come from Hawaiian Host and its workers.

The corporate, which makes its macadamia nut merchandise in Hilo and Honolulu below the Hawaiian Host, Mauna Loa and KOHO model names, stated it helps the invoice’s intent however not the invoice itself, which it calls flawed and doubtlessly unenforceable.

In testimony for the March 1 listening to, Hawaiian Host President and CEO Ed Schultz known as the invoice imprecise as to what constitutes photographs of the state. He questioned whether or not utilizing generic photographs of issues together with plumeria, hibiscus, seashores, volcanoes and even macadamia nuts — none of that are endemic to Hawaii — might be grounds for having to reveal use of international macadamia nuts on a product label.

Schultz additionally argued towards permitting present firm names and emblems utilizing phrases referencing Hawaii to be grounds for nut origin disclosure.

“It leaves a ton of inter­pretation, and conflicting interpretations, concerning what firm names or photographs could be prohibited below these labeling necessities,” he stated on the listening to.

In written testimony, Schultz submitted 5 pages of arguments towards the invoice with footnotes citing court docket rulings to assist the corporate’s place, which incorporates allegations that the invoice violates the U.S. Structure by burdening interstate commerce in a discriminatory approach that advantages Hawaii macadamia nut farmers.

Schultz additionally claims that the invoice would possibly battle with trademark rights, saying that it “would successfully penalize our corporations for using their names, considerably impairing our corporations’ beneficial mental property rights.”

The corporate additionally stated it will be pricey to amend labels, and that the invoice offers no transition interval for compliance.

“As is written, we consider the invoice is flawed,” Schultz stated on the listening to.

Michelle Leon-Guerrero, the corporate’s chief administrative officer, instructed to the Home Judiciary and Hawaiian Affairs Committee that it will be higher to determine a working group that features growers and processors to discover a answer to the difficulty, and requested that the invoice be deferred.

The committee voted 8-1 to advance the invoice with an modification eliminating a provision to let customers file lawsuits over violations. Because the invoice stands, the state Division of Agriculture could be the one to implement the regulation.

Previous to the March 1 listening to, the invoice was handed by two different Home committees — the Shopper Safety and Commerce Committee and the Agriculture and Meals Techniques
Committee — earlier than Hawaiian Host testified.

After the latest listening to, the total Home voted 50-1 on March 7 to ship the invoice to the Senate for consideration.

On March 13 two Senate committees scheduled a joint listening to for HB 1348 and two different crop-related payments on Friday. However on Thursday the macadamia labeling invoice was scratched from the listening to.

Sen. Mike Gabbard (D,
Ka­polei-Makakilo-Kalaeloa) chairs the Senate Agriculture and Atmosphere Committee however deferred remark to Sen. Jarrett Keohokalole, chair of the Senate Committee on Commerce and Shopper Safety, because the lead chair on the invoice’s committee referral.

Keohokalole (D, Kaneohe-
Kailua) stated he determined towards listening to the invoice given the sturdy contentions expressed within the current Home committee listening to.