kopepua Senior Member Joined: 26 Jun 2002 Posts: 217 Location: Kona Expertise: Professional
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Posted Tue Feb 16, 2010, 6:41pm Subject: Economic Analysis of Kona Coffee Blends
“KONA COFFEE BLENDS” TAKE PROFITS FROM KONA COFFEE GROWERS, STUDY REPORTS
KAILUA KONA, HAWAII, February 16, 2010 - A new study on the “Economic Effects of Blending Kona Coffee” concludes that current Hawaii law transfers profit from independent Kona coffee growers to the large corporations that produce Kona coffee blend. HRS 486-120.6 – a statute which authorizes use of the “Kona” name on packages of 90% foreign-grown coffee, is the legal loophole that blenders use to label their mostly foreign coffee with the Kona name, and the result is income flowing out of Hawaii into deep out-of-state corporate accounts.
The study was undertaken by Marvin Feldman, Ph.D. of the San Francisco-based firm of Resource Decisions. Dr. Feldman analyzed and contrasted two polar cases - a Business as Usual case and a No Blending case. The study's Executive Summary explains:
"Under the Business As Usual case -The analysis concludes that blenders gain up to $14.4 million in "economic rent" per year through the use of the Kona appellation on 10% Kona blends. Kona coffee growers experience an economic loss that may be on the order or possibly greater than the benefit to the blenders.
Under the No Blending case-- The analysis shows an upper bound estimate of $14.4 million loss per year to the blenders and marketers of 10% Kona coffee blends, with a corresponding gain to growers that may equal or exceed that loss. The blenders’ loss in the No Blending case would be offset by the benefit of improving consumers’ perception of the quality of “Kona Coffee” by avoiding attaching that appellation to a product whose taste is indistinguishable from commodity coffee. "
The full text of the Feldman Study is HERE: www.KonaCoffeeFarmers.org
In 2007, the Hawaii State Legislature made a factual finding that “existing labeling requirements for Kona coffee causes consumer fraud and confusion and degrades the ‘Kona coffee’ name” (Senate Concurrent Resolution No. 102, 2007). Now, the Feldman Study will focus the attention of the Hawaii State Legislature on the ECONOMIC damage caused by this consumer fraud, confusion, and misuse of the Kona coffee name - damage not only to Kona coffee growers, but to the State's revenues as a whole.
"Hawaii needs to protect the economic interests of its farmers", stated Kona Coffee Farmers Association president Bruce Corker, “ and should provide the same types of protections for the “Kona Coffee” name as California provides for “Napa Valley Wines”, Idaho provides for “Idaho Potatoes”, and the State of Georgia provides for “Vidalia Onions.”
The Kona Coffee Farmers Association is a volunteer, non-profit, community-based organization of coffee farmers with the mission to promote and protect the economic interests of Kona coffee farmers who grow and sell 100% Kona coffee and to seek greater legal protection of the Kona coffee name.
***************** Thank you for reading this. We of the Kona Coffee Farmers think it is an important document.
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