No sweetness in Anzac vanilla war

A trans-Tasman scrap is raging on a South Pacific island over a lucrative vanilla crop.

Family-owned Tauranga company Heilala Vanilla has been growing vanilla, the world's second most expensive spice, on Vava'u in Tonga for over a decade.

Last year, Brisbane-based family company Queen Fine Foods arrived and dispensed T$500,000 ($364,000) to Tongan farmers to boost production, locking them into a five-year supply contract in the process. It also persuaded Tonga's agriculture minister, Sangster Saulala, to back the project.

The stakes are high. Madagascar vanilla - the world benchmark - has jumped 100 per cent in price in a year.

Heilala has created a boutique brand with creative marketing; Queen sells vanilla in small medicine bottles and controls supermarket shelf space.

Neither side has a good word about the other.

Heilala's John Ross reckons Queen is "only trying to get rid of us".

Queen's Sam Himstedt said he was not throwing stones.

"The truth about the operational aspects of what they were doing was not good for farmers," he said.

In 2002 Ross, a retired dairy farmer, and the Papakura Rotary Club helped Vava'u locals repair damage after a fierce cyclone. A local family offered Ross four hectares of land to develop as an organic vanilla farm.

With his accountant daughter, Jennifer Boggiss, Heilala was created, growing 2500 Madagascar bourbon vanilla seedlings. Pods sent to Tauranga are processed into top-end food products.

Heilala's first vanilla harvest in 2005 was 40 kilograms. Last year it was nearly five tonnes which includes beans purchased from other farmers.

Queen arrived last year saying the Tongan Government asked it to help revive vanilla. Queen pays 257 growers an upfront fee of T$3 a plant but fixes the vanilla price at T$13 per kilo for green beans for five years.

Queen's Tongan agent recently went on national radio warning that if any contract grower sold beans to Heilala they would be taken to court.

Ross was called in by the Government and told he was paying farmers too much, at T$25. Ross says he has been threatened with legal action because Heilala's higher price was encouraging Queen growers to break their contracts.

"It is none of their business who I buy vanilla from . . . we will give them money, they give us beans."

Boggiss says Queen growers "were effectively screwed" on price and some growers had approached them to buy their crop. She said another grower on Vava'u, who did not initially sign up with Queen, was heavied. He was told, she said, that the plan was to get rid of Heilala.

"They have looked at us, and we have annoyed them . . . They have looked at our story and say this is an easy way to cut them off at the knees and this is a way to end them and then duplicate our feel-good story."

Himstedt, who is part of the family that owns the century-old Queen, denied they were trying to end Heilala.

"Honestly, our story up there is simply we were asked, many times by various people, over the last year or so, to help out in the industry."

Vanilla farms had been neglected and Queen came up with a programme to rehabilitate farms. Everybody was happy except Heilala.

"All I can say about those people [is that] they will throw and say, whatever they need to throw and say."

He says Queen is teaching growers how to cure the green beans so that they can add value. He reckoned Heilala was paying a "ridiculous price" for green beans just to break Queen.

"It is making up the story to suit the circumstance . . . The people choose our programme for a couple of reasons."

He defended paying per plant, saying it gives farmers some income during the long vanilla production cycle.

"I know the truth, hand on heart, we are an absolutely honourable company, we don't do anything wrong."

Stephen Knapp, chief executive of FairTrade NZ, said he has worked with both Heilala and Queen in Tonga to help them gain ethical certification. Neither has as yet, though Queen has launched a fair trade brand of Madagascan vanilla.

Knapp said a bit of a price war had erupted between the two companies.

He said Queen's main thrust has been to encourage new vanilla production by making upfront payments for fencing and rehabilitation of overgrown vines. It then pays above the Fair Trade minimum price for green beans. A lot of farmers had joined the scheme and the vast majority were not in production beforehand.

Knapp said Fair Trade has given Queen some advice about how to get farmers into an organisation to help it achieve ethical certification.