Mac nut growers
voice frustrations

By Rod Thompson
Big Isle correspondent

KAILUA-KONA -- Hawaii macadamia growers are saying "nuts" to their Australian competitors.

Speaker after speaker told the U.S. International Trade Commission yesterday that Hawaii companies spent many years and millions of dollars developing markets for their products.

Now the Austalians are moving into the same U.S. markets while spending hardly a penny.

The trade commission is studying the macadamia industry at the request of the U.S. Senate Finance Committee. A report, but no direct recommendation, will eventually be made to the committee, said Pat O'Laughlin, the commission's public affairs officer.

"To a large extent, foreign producers are free-riding on the image that Hawaii's producers have created," Seiji Naya, head of the state Business, Economic Development and Tourism Department, said in a statement.

State Rep. Paul Whalen said in a statement, "Our competitors have done nothing more than follow in the footsteps of Hawaii's growers, going into areas that we have opened up, and then selling at a lower price."

Rick Vidgen, president of MacFarms of Hawaii, said a prominent Australian macadamia executive once told him, "All you have to do to sell macadamias is to plug in your fax machine."

"Then it hit home," Vidgen continued, "that he and his industry were spending virtually nothing on sales and marketing."

Nations producing macadamias include Kenya, South Africa, Costa Rica, Guatemala and Brazil, but Australia has surpassed Hawaii to become the biggest producer in the world.

"I have picked on Australia, and I apologize," Vidgen said. "But they are now the leading producers in the world, and they have a responsibility to spend market development money."

Whalen said the Australians spend about 5 percent of their revenues on marketing. Hawaii companies spend about 20 percent, he said.

The Australians just got another boost when the value of their dollar fell 15 percent compared with the U.S. dollar, making their nuts 15 percent cheaper, Whalen said.

One option would be to impose tariffs on the Australian nuts, with the money going into a common fund to be spent on advertising, he said.

The Australians already have rejected voluntary spending on marketing, Vidgen said. About three years ago, the president of the Australian Macadamia Society proposed a levy of 10 cents per kilogram to be used for market promotion, he said.

The proposal was rejected.

Vidgen concluded with a South African proverb: "If you are thinking of a rhinoceros, you should also be thinking of a tree."

Translated, it means planning your market before you produce is a good idea, he said.