Counterfeit coffee: Senate bill to re-introduce mandatory certification for green advances

West Hawaii Today - February 4, 2019

By: Max Dible

KAILUA-KONA — Counterfeiting isn’t a crime limited to printing fake currency.

Falsifying a brand name, for instance, can be just as profitable, providing sellers and distributors access to markets and price points they could never achieve otherwise.

It’s unclear just how frequently coffee counterfeiting has happened around Kona, Ka‘u and other popular Hawaii brands since the recession required the state roll back a number of inspector positions at the state Department of Agriculture.

But by clearing the Senate Committee on Agriculture and Environment, Senate Bill 869 came one step closer Friday to reinstating a mandatory certification process for green coffee coming out of the state, protecting brand integrity and the bottom lines of farmers alike.

“This bill attempts to decrease the counterfeiting and really try to further improve the prosperity of the coffee industry,” said Sen. Dru Kanuha, who represents most in the Kona and Ka‘u coffee businesses.

“(It) requires shipments of coffee beans to be identified and recorded within the origin before shipping from Hawaii,” Kanuha added. “It’ll create a proper method to prove the grade and quality of our Hawaii-grown coffee beans.”

Bruce Corker, owner and operator of Rancho Aloha Farms and a board member of the Kona Coffee Farmers Association, said small farmers have always supported mandatory certification because of suspicions about certain roasters on Honolulu and the lack of mainland regulations protecting brand integrity.

Mandatory certification stipulations were repealed after the Department of Agriculture downsized. Kanuha explained why.

“A lot of people had a ton of coffee that they couldn’t ship because there were no inspectors,” he said. “This is basically putting back the language that was stricken out.”

Corker and other Hawaii Island coffee farmers took issue with some of that language, however, prompting two amendments to SB869 by Oahu Sen. Mike Gabbard, chairman of the Senate Committee on Agriculture and Environment, before its passage.

One change was to language in subsection D of the bill, which initially read, “All Hawaii grown green coffee beans shall be inspected and certified by the department for grade and origin unless otherwise specified by rules of the department; provided that this subsection shall not apply to shipments of one hundred pounds or less.”

The alteration Corker lobbied for and achieved removed the words “unless otherwise specified by rules of the department,” guaranteeing the inspection exemption for small farmers shipping totals of 100 pounds or less.

Inspections come at a cost to the producer and eat into the profit margins of all operations, but hit the smaller outfits harder. That fact also speaks to the second amendment that came down Friday, which applied to an earlier portion of the bill that initially specified uniform inspection fees rather than inspection fees levied per pound.

Corker said the amendment Gabbard made in that regard makes pricing for inspections, which small and large producers alike now desire, more equitable.

Several years ago, Corker suspected larger processors preferred a complete lack of inspection fees and were happy when language mandating them was removed from law. He believes those operators, in the interim, have come around to small farmers’ ways of thinking when it comes to brand preservation.

“My understanding is the Hawaii Coffee Association, which is dominated by big processors and blenders in Honolulu, requested (the Legislature) make this change,” Corker said. “I think they now have the same concern that we had seven or eight years ago, and that is if you don’t have a (paper trail), it’s more difficult to control counterfeiting.”

The Senate Committee on Commerce, Consumer Protection and Health is next to hear SB869. A hearing had yet to be set as of press time.