(BIVN) – A bill that intends to protect the Hawaiʻi coffee brand by requiring more accurate labeling and designation of origin for blended coffee passed the State House on third reading Tuesday.

House Bill 144 HD1 “requires coffee blend labels to disclose regional origins and percent by weight of the blended coffees,” and “prohibits using geographic origins of coffee in labeling or advertising for roasted or instant coffee that contains less than 51 percent coffee by weight from that geographic origin.”

“I’ve worked in the coffee industry at Lion Coffee, Superior Coffee, Royal Kona Coffee,” said State Representative Bob McDermott, who – along with fellow Republican, Rep. Gene Ward – voted against the bill. “This is a battle that goes on every year and it appears that in order to call coffee a Kona blend you’re gonna have to have 51% of the coffee be Kona coffee. The reason they don’t use 51% now is because Kona coffee is just prohibitively expensive. It’s $12, $14 dollars a pound, I don’t know. But it’s very expensive so they blend it and thereby blending it they sell more coffee as a Kona blend.”

“This is kind of a turf war which we’re getting engaged in,” Rep. McDermott said, “and then we impose these labeling restrictions which are meaningless when we export it to California or Japan or other places like that because we can’t compel them to follow our laws.”

According to a commitee report, Hawaiʻi County Councilmember Rebecca Villegas joined “We Are One, Inc., Cassandra Farms, Smithfarms Kona Coffee, Lavarock Farm, Konalicious Organic Coffee, Konaloha Farms, Kuaiwi Farm, Hala Tree Coffee, Kanalani Ohana Farm, Origin Coffee Roasters, Lokoea Farms, Sugai Kona Coffee, Pohaku Farm, O‘ahu County Committee on Legislative Priorities of the Democratic Party of Hawai‘i, Kona Coffee Farmers Association, Hawaii Farmers Union United, Hawaii Farm Bureau Federation – Kona County Chapter, Hawaii Farmers Union, Maui Farmers Union United, Hawai‘i Center for Food Safety, Hawaii SEED, and numerous individuals” testifying in support of this measure.

The report noted that the Hawaii Food Industry Association, Hawaii Coffee Company, and Kona Coffee Council testified in opposition.

Bruce Corker, a member of the Legislative Committee for the Kona Coffee Farmers Association, explained his support in written testimony with these three points:

1 — For more than 25 years Hawaii has been the only region anywhere in the world that authorizes by law the use of its geographic origin names in the labeling of agricultural products with as little as 10% of the content actually grown in the named region. It is long past time for Hawaii to provide its coffee farmers with the types of protections offered by other states to their specialty crop farmers—for example, Idaho’s protections for its potato farmers, California’s protections for Napa and Sonoma wine grape growers, and Vermont’s for maple syrup producers against misleading and fraudulent marketing.

2 — The coffee blenders and their allies will again—as they have for years—argue that no change should be made in the blend law until a “study” has been done on the economic effects of a change. Despite enormous economic resources (for example, Hawaii Coffee Company is a wholly owned subsidiary of the State’s largest beer and alcohol distributor (Paradise Beverages), which in turn is a wholly owned subsidiary of Topa Enterprises, a multi-billion-dollar Mainland conglomerate), the blenders for years have never taken steps to obtain such a study. The reason they have not done so— they know that any reputable study will show that 10% Hawaii coffee blends take millions of dollars each year from farmers that go to the blenders as “excess profits” from using Hawaii place names on packages of coffee containing 90% non-Hawaii grown coffee.

And there are studies that have already been done: a 2018 United Nations study concluding that Hawaii origin brands, like Kona, do “not enjoy any strong protection of its name” and that as a result “downstream stakeholders [rather than farmers] reap the economic benefits of the fame of Kona.” Here is a link to the UN study.

Also see the 2010 analysis of resource economist Marvin Feldman finding that as much as $14.4 million each year may be flowing out of the pockets of Kona coffee farmers and into the “excess profits” of blenders. Here is a link.

3 — The complaints of the blenders about the burdens of changes to the label identification of the 49% non-Hawaiian coffee in the blends are greatly exaggerated. Hawaii Coffee Company, for example, has its own label printing capability that would allow label changes with little or no burden. In any case, consumers are entitled to know what is in the package—a small price for the blenders for using Hawaii origin names on packages containing substantial amounts of foreign-grown coffee.

Any even if the Committee were to see the label changes as an issue, the matter could be easily addressed by adding a provision to give an option to blenders to use a broader disclosure of the total percentage of non-Hawaii coffee in the package–for example, “51% Ka’u Coffee; 49% Imported, Non-Hawaii-grown Coffee”. What is important is that consumers be clearly advised that while the package may carry a name such as “Ka’u Blend”, that up to 49% of the package content is foreign, imported coffee.

The Hawaiʻi Food Industry Association, which says it is comprised of two hundred member companies representing retailers, suppliers, producers, and distributors of food and beverage related products in Hawaiʻi, had this counter testimony in opposition:

We believe in encouraging and supporting local food and drink production. This law would make it harder for businesses selling Hawaii coffee to create labels that best suit their brand and make it harder to promote local coffee to consumers. The existing coffee label regulations are clear and provide ample information to customers about what type of coffee they are getting.

Different ways of blending, roasting, and even brewing coffee create different products with different flavors and characteristics. Decisions about developing and marketing these different types of coffees should be left to coffee growers, blenders, roasters, brewers, and coffee drinkers. These are not the type of things that should be mandated by government bodies. For these reasons we ask that you hold this measure.

The bill now moves on to the Hawaiʻi State Senate.