Jones mucks in with a $19.5m loan to help with the mushrooming of a Te Mata company

Commercial mushroom growers can be a feisty bunch, a Newsroom report in 2017 suggests. We wonder, therefore, how rival companies will respond to the Government’s favouring one of their number with a $19.5 million loan to increase its production (to their detriment in the marketplace, we imagine).

In a report which dealt with an industry row over the importing of plant manure from Europe that contained traces of horse and chicken poo, Newsroom observed:

The deeper you dig into this murky world of manure, the more you find a tale of intrigue involving anti-competitive behaviour, a government department under threat of a judicial review now dragging its heels on an import licence it’s already granted and revoked,  job losses, and worse – production stalled on tonnes of high-quality super-food vegetables that could drive mushroom prices down and become a thriving export industry. But there is also a deep-seated fear from a wide range of New Zealand farmers and food producers who know that it doesn’t take much of a bio-security slip-up to devastate an industry. 

Mercer Mushrooms was importing substrate – or mushroom compost – from The Netherlands. To get the substrate into New Zealand Mercer had persuaded the Ministry for Primary Industries to re-write the import laws on this product.

Newsroom reported:

Mercer is the nearest mushroom producer to Auckland and the city’s supermarkets were happy to see a high quality product that hadn’t been bounced around in trucks from the South Island. A little competition was driving prices down, too. 

But the country’s biggest mushroom producer, Christchurch-based Meadows Mushrooms, had other ideas and flexed its muscle. It raised questions about the safety of the imported substrate and threatened MPI with a judicial review of the licence.

The ministry halted the import of substrates until it could do more work on a new import standard. 

Meadows last year became embroiled in another industry controversy triggered by imports, this time related to increasing numbers of shiitake mushroom growers using imported Chinese growing ‘logs’ on which the fungi is grown, because it is cheaper than using New Zealand-made logs.

Bruce Mackinnon, co-owner of Hillcroft Mushrooms, a small Hawke’s Bay producer of organic shiitake mushrooms, complained his sales had fallen around 80 per cent over two years as his competitors switched to cheaper imported growing logs.

He urged Kiwi consumers to check they were getting what they thought they were getting when they bought mushrooms labelled as New Zealand-grown.

Meadow Mushrooms a few weeks earlier had launched its “New Zealand grown” shiitake mushrooms but acknowledged they were grown from Chinese logs.

Meadow marketing manager Melanie Rushton said its packaging complied with Australian and New Zealand standards.

“Because effectively we are producing the mushrooms here to New Zealand safety standards in a controlled environment, and they’re being grown here using our resource and our expertise, water and all of our facilities.

“We didn’t want to mislead anybody, so checked with Australian and New Zealand standards to make sure we were okay to be able to say that.

“We are not hiding anything … we are still updating our information about our product that’s just launched so we are going to be telling everyone all about the details behind it as well.”

But Mackinnon said China’s poor environmental record raised concerns for consumers.

Again, the Ministry for Primary Industries was involved.  It said it did not carry out routine testing of spawn logs or mushrooms because it was up to growers, manufacturers, importers and retailers to ensure their food was safe and suitable.

Point of Order mentions these industry spats as we muse on news that the government is dispensing commercial favours in Hawke’s Bay, but not – that we can see – to Mackinnon’s company.

No, a much bigger company is the beneficiary of Shane Jones’ latest distribution of corporate welfare. Maori welfare comes into considerations, too.

Jones has dipped into the Government’s COVID-19 Response and Recovery Fund (a $3 billion trough set aside for infrastructure projects) and come up with a $19.5 million loan for Te Mata Mushroom Holdings Ltd.  This will help create the largest mushroom production centre in the North Island and sustainable fulltime employment for more than 200 people.

 “The primary role of the business is producing compost and growing mushrooms. It is also one of the largest non-seasonal horticultural workforces in Hawke’s Bay,” Shane Jones said.

The $19.5 million will be used for construction projects  at two Hawkes Bay sites.

Work at the Brookvale, Havelock North, site will include the expansion of the growing facilities and an upgrade of the existing composting facility, Jones said.

“The enclosure of the buildings and use of new bio-filter technology will eliminate smell issues for Havelock North residents.”

Construction at the Mt Herbert, Waipukurau, site will include the construction of a dam, which is already consented by Hawke’s Bay Regional Council, so that it is self-sufficient. Following that, construction of composting and growing facilities will begin.

The construction is expected to create 107 much-needed building and associated jobs in the region.

“Te Mata Mushrooms currently employs 120 people. It will work with the Ministry for Social Development to develop training programmes for apprentices and learning pathways for new recruits. It is expected that up to 30 per cent of the more than 200 estimated additional workforce will be Māori,” Shane Jones said.

Future growth plans include supporting independent mushroom growers through technology, compost production and marketing.

“This is a fantastic project supported by the Government that will produce huge economic and social returns for the people of Hawke’s Bay.”

Te Mata Mushrooms is one of six companies listed on the website of Kiwi Mushrooms, which represents “the mushroom growers of New Zealand”.

Some growers, anyway. 

The listings are –

Te Mata Mushrooms, Havelock North, Hawkes Bay – situated on the outskirts of Havelock North in Hawkes’ Bay, The Te Mata Mushroom Company is New Zealand’s second largest mushroom farm. The farm currently produces 20-24 tonnes of mushrooms per week,

Quality Mushrooms, Ohaupo, Waikato – producing approximately 6-7.5 tonnes of mushrooms per week.

Out of the Dark Mushrooms, South Auckland, Auckland

Mercer Mushrooms, Mercer, Waikato

Parkvale Mushrooms, Parkvale, Carterton

Greendale Mushrooms, Burnham, Canterbury – Greendale Mushrooms, one of only two commercial scale mushroom farms in the South Island, produces approximately 2 tonnes of white button mushrooms per week

Meadow Mushrooms, the industry heavyweight, is not on the Kiwi Mushrooms list.

Its farm is based in Canterbury, where it first began some 50 years ago.

Its website says:

Continual investment and a genuine commitment to sustainable business practices has seen it flourish into the country’s largest and only fully integrated mushroom farm – complete with farm and pack house and serviced by a spawn lab and a compost yard, both in nearby sites.

It has more than 450 workers and handpicks more than 9 million mushrooms a week.

Ohau Gourmet Mushrooms (MycoBio Ltd), launched in 2018. It describes itself as a ‘low-tech’ startup growing Oyster and Shiitake mushrooms for restaurants and farmers markets on the lower half of the North Island (NZ).

Its products include fresh oyster mushrooms and shiitake and its website says it hopes to add Hericium (aka Coral Tooth) to its product range.

Ohau’s owners may well be wondering: oh, how do we get a multi-million-dollar boost from Shane Jones. Other mushroom companies should be asking the same question.

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