When the Australian government gave the green light for a two-year commercial kava pilot program in December last year, “the excitement was palpable,” Australia’s Minister for International Development and Pacific, Senator Zed Seselja said.
The long-anticipated announcement followed an earlier decision to increase the amount of kava individuals could carry into the country (from 2kg to 4kg), and essentially ended a 15-year ban on the commercial importation of kava into Australia.
That ban was the result of fall out from a controversial study in Germany, which linked kava in pharmaceutical products to liver damage.
As of 7 April this year, approximately 46 tonnes of kava had been imported into Australia under the pilot.
PHAMA Plus (a A$36 million Australia and New Zealand program working to maintain and improve existing market access) says this kava came from six countries, through 193 suppliers. The biggest sources were (in order) Fiji, Tonga, Vanuatu and New Zealand. Samoa, Solomon Islands and Papua New Guinea are yet to join the trial at that point.
However 33% of kava imports failed initial inspections for non-compliant labelling. Problems included missing importer details, lot codes, country of origin information and warning statements.
Fiji’s government says kava exports netted FJ$43.6 (US$20.2) million in 2020. The Vanuatu Kava Industry Association says the crop brings in VT $400 (US$3.45) million in annual export earnings. Tonga’s kava farmers have expressed the hope that the crop and exports to Australia will be central to the recovery not only from COVID, but also from January’s devastating volcanic eruption and tsunami. Agriculture represented over 65% of Tonga’s exports in 2015/16 reports the Food and Agriculture Organisation. Kava is also an important crop in Solomon Islands, Federated States of Micronesia, Samoa and Papua New Guinea.
Clearly the stakes are high.
Ensuring quality
The surge of new product onto the Australia market has brought prices down, from highs of up to A$400 per kg according to Pacific Trade Invest Australia during the height of COVID lockdowns, to half of that now, although prices vary and there is some volatility.
Fiji Kava CEO, Dr Anthony Noble says they understand about 400 import licenses have been granted by the Australian government, most of them for very small suppliers. The more crowded market raises three concerns he says; the varieties being exported, adulteration and food safety.
Dr Noble says while Australian import regulations don’t specify what varieties of kava are allowed in, the World Health Organization Codex has standards that could be adopted.
Further, “adulteration of kava in the supply chain is something that’s [of concern]. It’s a very valuable product, the temptation to put a little bit of cement or a little bit of flour or a little bit of something else with the kava is very high when you pay by the kilogram.
“The other main [concern] is food safety. So making sure that there is not a bacterial load that could potentially make someone sick in the same way as you would with any other fresh food.”
Dr Noble says as a listed company, Fiji Kava “has these things buttoned up, but it’s not a cheap thing to do. So small operators can’t do that.
“The three major companies (Fiji Kava, Lami Kava and Green Gold [Kava]), I think we constitute 98% of the kava coming in, I think we’re all comfortable that those bigger players are doing things the right way. A lot of that a lot of that infrastructure is set up to access the U.S. market, which demands similarly high food safety standards.
“Overall there are challenges, but I think the amount of kava that we might get into the market that’s risky is probably quite small and certainly wouldn’t make it to the mass market.”
Larger, well-capitalised players have also been able to prepare for the Australian pilot, investing in upgraded processing facilities. Last November, Lami Kava commissioned an impressive new wash and grading facility, turning what could be a three-day job into a three-hour one. Lami Kava Managing Director, Donny Yee said,“We’re also increasing the number of farmers that we buy from. So the facility has actually done us a great thing. Having that facility, we could buy probably almost twice as much as we used to. So that’s good for the farmers and good for us.”
In Vanuatu, kava scientist Vincent Lebot says the pilot program is “very good news for kava and a wonderful opportunity for producers in the Pacific.
“However, at this stage this is still an ‘experiment’ and we are not sure yet if this situation will continue in the future, or if there will be more restrictions. The Australian authorities are testing the safety of kava for free consumption on their national market, so kava will be under heavy scrutiny during this experiment. What is at stake is very important because after the U.S., where kava is a success story so far, this is a western country traditionally hostile to kava who is testing the safety of kava,” Lebot told Islands Business.
“We now have very good regional quality standards recognised internationally under the WHO/FAO: the Codex Alimentarius standards. This is a major progress to secure the future of kava. Kava is now considered internationally as a food product. Just like tea or coffee, and we have a regional system to guarantee its quality. It is for the Pacific Island Countries to use these standards when they are involved in international trade to avoid what the German companies did in the late 1990s when they were coming to the South Pacific to buy peelings, two-day kava and other kava by-products without any quality control. We know what the tragic consequences were,” Lebot added.
Regional action: Wan Ples, Wan Kava
The Pacific Islands Forum is currently developing a regional kava strategy, and implementing those regional Codex standards will be part of this work.
Speaking at the first regional Kava Working Group Meeting in January, Director Programmes and Initiatives at the Pacific Islands Forum, Zarak Khan said, “with adequate policies and frameworks, we will ensure that kava can change the economic landscape of the Pacific Island Countries.”
He flagged issues of shared concern including: “protection of kava, and in particular the Geographical Indications (GIs) for kava. The World Intellectual Property Organization (WIPO) has been supporting Pacific Island nations on GIs, Branding and Trademark “to protect kava as a Blue Pacific green gold commodity”.
The sector also suffers from a lack of data regarding supply and value chains. “Quality data is critical in order to have an accurate assessment of where the sector is at the moment, where the gaps are, whether it’s in production, consumption, trade or at the policy level,” Vanuatu’s Minister for Trade, James Bule told the Pacific Regional Conference on Kava.
SPC economic statistics adviser, Nilima Lal, has written that the lack of data could be holding back investment and growth prospects for the kava industry.
Environmental concerns
Given the perceived opportunities in kava, there are concerns over the impact of unchecked kava cultivation on Pacific environments.
On the DevPolicy blog recently, Adjunct Associate Professor (Sustainable Development) at the University of the Sunshine Coast, Richard Markham, wrote that there is a “discouraging sense of having seen all this before” with other commodities (specifically ginger and taro/dalo) “as export of one commodity after another is encouraged by government intervention, booms briefly, and then declines in a welter of recrimination over interlinked biosecurity and quality issues, and collapsing prices”.
He writes that as farmers clear fertile land deeper into forests with chainsaws, sometimes burning the vegetation in their haste, the knock-on effects on the environment are “horrible”.
“With the steep terrain and high rainfall, topsoil is rapidly washed away, taking with it the fertility of the soil, and causing excessive sedimentation and flooding in the lower reaches of rivers where many communities are located and food crops grown on riverside alluvium. Washed out to sea, the soil is then deposited as a lethal sediment load on the coral reefs – on which communities depend so heavily for food security and, in better times, for tourist dollars.”
The Pacific Community is working to address this issue by promoting sustainable production, with Vanuatu Minister, James Bule, telling last year’s regional kava meeting: “the increase in production over the last few years has led to corresponding increases in the area of land cultivated and the clearing of previously untouched forests thus creating concern for the potential impacts this will have on our fragile ecosystems.”
Markham also cites potential social impacts of a kava boom, as growers spend more time at their plantations protecting their valuable crops from thieves.
He says avoidance of a man-made disaster requires proper land-use planning, and incentives for greater sustainability, not just for increased volumes. “Kava would make an excellent test case for a new, broader model of more sustainable development,” he suggests.
The new kava consumer
Kava bars are popular across the Pacific Islands (see p) and have grown in the United States (although COVID has closed some ventures), and the sector believes there is great potential for similar businesses in Australia and New Zealand.
Todd Henry owns Four Shells Kava Lounge in Auckland. He started the business after being introduced to kava through his Tongan wife, ‘Anau Mesui Henry, and noticing interest in the beverage amongst friends. He sources kava through New Zealand importer, The Kava Society, as well as directly importing kava from Fiji and Tonga.
Henry says their customers drink kava for “wellbeing and building community and things like that. And it’s an alternative to alcohol.”
Four Shells is driven more by quality than price. “It’s almost like you can compare it to the way people shop for gourmet coffee. They want the best and they don’t want to compromise,” he told a recent webinar.
“We’re creating new kava drinkers just from being visible and from being accessible and providing that element of education around kava,” he continues. “What we find with your average New Zealander who’s not of Pacific Islands origin, is there a lot of misconception around kava, the most common ones being kava has alcohol, kava is a hallucinogen, that it is a very powerful, addictive drug, and then on the other end of the spectrum, you have people who say kava does nothing, tastes like muddy water.
“So just being there to answer people’s questions and they can come and experience it, have us give them the proper guidance on things, it’s really good.”
Henry believes the key is to present kava in an accurate, authentic way. Four Shells Kava Lounge does not flavour kava, mix it with alcohol, present it as a legal high or as a “party thing”, he says.
“We are benefiting farmers just by growing the market here in New Zealand in a way that I think is it’s not gimmicky, it’s not creating kava to be a fad, but representing it in a way that kind of everybody can sort of understand.”
Fiji Kava is targeting a similar demographic, but with different products in looking at the lucrative and growing market for complementary and alternative medicines.
Fiji Kava’s powder and nutraceuticals products are stocked in Australia’s Coles supermarket and Chemist Warehouse chains. However CEO, Dr Noble, says awareness and acceptance of kava in the Australian market is very low – their research about two years ago found just 16-18% of respondents had a positive view about kava and were willing to try it. Dr Noble says they have tried to address this by focusing on the medicinal benefits of kava, “in enhancing sleep, muscle relaxation, sports recovery, as well as the anti anxiety and relaxing effects.”
He believes their marketing investment is “starting to move the needle a little bit. So the core consumer demographics that we’re looking to target are men 18-35 and women 25-35. It’s a young audience compared to most medicinal products…Normally you’re waiting for somebody to get arthritis or be ill to need to have a product, but… sleep disturbance and anxiety affect younger people.”
What’s next?
At the launch of the pilot, Australia’s Minister for Health and Aged Care, Greg Hunt, said the trial will be strictly monitored: “The Morrison Government will undertake robust monitoring and evaluation of the pilot, working closely with state and territories, recognising their regulatory role in the domestic supply and use of kava.”
Tanuvasa Semy Mauga Siakimotu, Biosecurity and Environmental Safeguard Advisor with PHAMA Plus stresses, “getting access is only part of the equation. Maintaining access to those markets is very important.”
He suggests it’s time for Pacific producers to step up.
“[For] kava and many of our products, we have continued to focus on participating in those value chains in the same way we have done in previous years, 10, 20, 30, 40 years.
“What’s different to what we used to do years ago?
“We still grow kava, we harvest kava, we pound kava, we put it in a bag and we send it off. And we expect the market to buy it. If kava was being exported by another country from outside the region, they would have their labelling down pat.”
While there are legal and biosecurity requirements around getting packaging right, there are also marketing benefits to doing it well.
“More and more consumers of our products are asking questions around how was this made? How was it grown? Was it organic and so forth?” Siakimotu says. “If there is a label that represents compliance with a quality standard, that encapsulates food safety as a standard … I think that would help to develop confidence in the marketplace of the products.
“Kava as a product hasn’t had a good journey you know, we’ve had the ban that was imposed by the EU in early 2000. That gave kava a bad image and we’re trying to bring that back now to a place where they appreciate kava for what it is. And it’s a safe product. There’s been a lot of research to support that. And so, to actually then, influence the consumer in their consideration of product safety and how it was grown, those standards are important. The challenge is standards by themselves are just guides and there needs to be leadership and ownership, and there needs to be commitment to enforcing and implementing those standards.”
Additional reporting by Dionisia Tabureguci
