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Moves made to safeguard Manuka name
April 13, 2006

An application has been made to secure the ‘manuka’ name after concerns were raised by manuka honey exporters that the word ‘manuka’ was legally unprotected in Europe and could fall into the wrong hands.

Experience shows that New Zealand exporters need to be vigilant in the area of trademark protection – in a recent example a French wine maker has registered the name ‘Kiwi’ which means New Zealand wineries can not use the word in France without the threat of legal action.

According to Sue Irwin Ironside, partner at intellectual property lawyers Baldwins, while manuka as a word would be exceptionally difficult to protect in New Zealand as it is in general use, that is not the case in other countries.

“In Europe, for example, manuka would be an uncommon name and could be registered by a company that is unconnected to New Zealand – even though manuka is exclusive to New Zealand.”

When the vulnerability of the name was noted by natural health products company Comvita, it immediately applied to register the name ‘manuka’ in the European Union as a precautionary move.

Comvita chief executive Brett Hewlett says after seeing that other interests have registered or tried to register ‘manuka’ elsewhere in the world we decided to move quickly.

“It’s important to ensure that registrations for manuka don’t fall into the wrong hands as that could result in legitimate exporters being sued for trademark infringement.”

National Beekeepers Association executive officer Jim Edwards says he is pleased to see moves are being made to protect the name for manuka products on behalf of all New Zealand beekeepers.

“We must protect the reputation of New Zealand honey internationally and within our home market.”

New Zealand Honey Packers and Exporters Association chairman Allen McCaw says it is a wise move to protect the brand or name overseas to ensure New Zealand doesn’t lose out to offshore interests.

“As long as there are no restrictive practices that prevent any New Zealand honey company using the name ‘manuka’ then we are comfortable.”

Hewlett is clear about the intention: “It is not, and never will be, Comvita's intention to obstruct any New Zealand-owned manuka product brands from selling in the EU. Healthy competition in such a vast market can only serve to continue to build credibility for the therapeutic properties of our unique and indigenous manuka honey.”

But Hewlett says in essence the New Zealand honey industry needs to get moving on this one.

“We have a holding position in Europe but this is an industry problem that should be dealt with collectively.”

END

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Comvita Reports Profit Lift Following Strong Growth in Asian Markets, Offshore Acquisitions
March 3, 2006

COMVITA LIMITED 2005 ANNUAL REPORT NEWS RELEASE


Natural healthcare products company, Comvita, has lifted its annual net profit after tax by 26% to $1.59 million. This result was achieved on revenue of $31.3m, up 13% on 2004. A final fully imputed dividend of 3 cents per share has been declared, bringing total dividends to 5 cents (compared with 4.1 cents for 2004).

Comvita Chairman, Neil Craig, says the company achieved strong growth in all offshore markets with export revenue at 60% of total sales, now larger than domestic revenue for the first time.

“With EBITDA of $4.09 million, margins were maintained at the operating level against a background of a continuing strong NZ dollar. This is testament to our strategy of ongoing strong marketing support for the Comvita brand and ownership of the distribution channels in all key markets.”

Comvita’s offshore growth has been spurred by a planned strategy to take greater control of its distribution channels. As part of this strategy, on
December 1, 2005, Comvita purchased its UK distributor (NZ Natural Foods) in order to increase its presence in the UK and launch in a very controlled manner into certain European markets. In China and Taiwan, Comvita has made strong progress with the rollout of 20 Comvita-branded retail stores. These stores have been funded by local distributors, however all marketing is controlled by Comvita.

Subsequent to year-end, Comvita entered into a long-term exclusive licensing agreement for the Americas with Derma Sciences Inc, covering the manufacturing and marketing of certain patented wound care products. This agreement, which involves taking a small equity stake in Derma Sciences in exchange for dedicated marketing spend, should result in wound care products being launched in the US in the second-half of 2006.

The Board of Directors appointed Neil Craig, the current executive chairman of ABN AMRO Craigs, as Comvita's new chairman in September 2005. Also appointed to the Board mid-2005 was business, marketing and innovation consultant, Dr David Cullwick. Former chairman, Bill Bracks, continues to make a significant contribution as a company director.

A new chief executive, Brett Hewlett, was also appointed in September 2005, along with the recent appointment of Dr Ralf Schlothauer as General Manager Technical.

Dr Schlothauer has global experience in new product development, including nutritional ingredients. At Comvita, he is taking overall strategic and functional responsibility for research and development, including new product development.

According to Craig, CEO Brett Hewlett has already made his mark with the company with the development of a focused five-year growth strategy based on leveraging the brand and innovation in wellness products from natural source materials.

“The future looks very exciting for Comvita,” says Craig. “Brett has very quickly built an executive leadership group capable of delivering on the company’s 2010 strategy.”

Hewlett says the result is very good, given the currency issues and a flat domestic market.

“Sales for the first two months of this year have been significantly higher than the same period last year, and while it's still early days, provided the currency performs in line with predictions, we should beat both 2005 sales and profitability. This will be driven by sales increases in all export markets, margin improvement at the operating level and an increased contribution from our wound care division,” said Hewlett.

“In order to achieve our growth targets, we need to continue to invest in our people. Plans are also underway for warehouse and factory expansions, and the completion of a new ‘Wellness Centre’. We have initiated a number of projects targeting strategic raw material supply, in anticipation of long-term growth in demand. We will also invest in retail merchandising assets and overall marketing spend. More details of these projects will be released later in the year as they progress.”


Appendix – Results

Year to 31 December 2005 (NZ$)

20042005
Group Revenue 27.6m 31.2m
Net Profit after Tax1.26m 1.59m
EBITDA 3.64m4.09m
Earnings per share 11.0c 12.3c
Dividend (fully imputed) 4.1c 5.0c

Final Dividend

3.0c

Ex date14 April 2006
Payable date 28 April 2006
(Dividend Reinvestment Plan will apply.)


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Dr Ralf Schlothauer Joins Comvita Management Team
February 20, 2006

Comvita New Zealand has appointed Dr Ralf Schlothauer as General Manager – Technical.

Dr Schlothauer will be a member of the Executive Management Team with overall strategic and functional responsibility for research and development, new product development, regulatory affairs, quality and technical support for production, supply and marketing.

Originally from northern Germany, Dr Schlothauer has worked in New Zealand for extended periods, with Massey University, New Zealand Dairy Research Institute (now part of Fonterra) and most recently at Tatua Nutritionals.

In between assignments, Dr Schlothauer was Group Manager - Probiotics for Danisco in Germany. Danisco is a Danish company specialising in high-end nutritional ingredients.

Dr Schlothauer holds a Master of Technology and a PhD in bioprocess engineering, both from the Technical University of Hamburg-Harburg.

ENDS


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