Farmer Reps Accuse Roasters of Counterfeiting as Kona Controversy Escalates

Coffee farmers from the Kona district of Hawaii’s big island have filed a civil suit against eight U.S. roasting companies and several of the country’s largest grocery and online retailers. At issue in the class action suit, which seeks relief for some 600 to 1,000 Kona-based coffee farmers, is the labeling of packaged of coffees that bear the “Kona” name.

Plaintiffs say that lab testing of 19 different packaged coffee products marked as Kona or Kona blends prove that they contain only trace amounts of Kona-grown coffee, or no Kona coffee whatsoever.

Coincidentally, the suit was filed one week before the Hawaii state legislature moved forward a bill that would require all products marked as Kona coffee to contain at least 51 percent Kona coffee. Currently according to state law, coffee roasters or other retailers may sell Kona coffee if it contains at least 10 percent Kona.

The Kona Civil Suit

Filed Feb. 27 in the U.S. District Court for the Western District of Washington, the civil suit identifies major online and in-store retailers as defendants, including: Walmart, Amazon, Kroger, Bed Bath & Beyond, Safeway, Costco, Albertsons, World Market, TJ Maxx and Sprouts Farmers Market.

In addition, the suit identifies numerous coffee roasting companies. Hawaiian roasters named as defendants are Hawaiian Isles Kona Coffee, Mulvadi Corp. and Maui Coffee Co. Mainland coffee roasting companies named include Colorado-based Boyer’s Coffee, Michigan-based Magnum Coffee, Indiana-based Copper Moon Coffee, Florida-based Gold Coffee Company, and Minnesota-based Cameron’s Coffee.

Plaintiffs in the suit are Kona Coffee Farmers Association member and past president Bruce Corker of Rancho Aloha, Colehour and Melanie Bondera of Kanalani Ohana Farm, and Robert and Cecilia Smith of Smithfarms.

The lawsuit invokes the Lanham Act, a 1946 U.S. trademark act designed to protect from “false designation of origin” in the sale of consumer products.

“Even though only 2.7 million pounds of authentic green Kona coffee is grown annually, over 20 million pounds of coffee labeled as ‘Kona’ is sold at retail,” the suit states. “That is physically impossible; someone is lying about the contents of their ‘Kona’ products.”

The suit presents lab testing of 19 coffee products packaged by the roaster defendants and sold by them directly or through the major retailers named in the suit. It contends that the Kona district’s unique volcanic soil, humidity conditions and growth elevation create distinct elements that can be traced through lab testing. Specifically, the testing presented in the lawsuit focuses on the strontium-to-zinc barium-to-nickel ratios found in the coffee products.

“Defendants sell packaged coffee products that are presented to consumers as Kona coffee, but that actually contain cheap commodity coffee beans,” the suit alleges. “Some packages contain trace amount of Kona coffee, while other packages contain no Kona coffee at all.”

The suit further claims that the selling of coffees marked as Kona that may contain little to no actual Kona coffee drives down both the reputation of and prices for actual Kona coffee.

“This tremendous supply of counterfeit Kona coffee pushes prices down sharply,” the suit states. “And that low pricing artificially restrains the profitability of legitimate Kona coffee farms. Second, the Defendants are selling run-of-the-mill commodity coffee and labeling it as Kona coffee. A consumer who tries that inferior product, thinking it is Kona coffee, will conclude that Kona coffee is not worth a premium price.”

The lawsuit resembles a similar suit filed in 2011 by a California resident that was backed by the Kona Coffee Association. Grocery chain Safeway, the defendant in that suit, settled for undisclosed terms two years later. At that time, the Kona Coffee Association expressed disappointment with the settlement, stating that it “leaves unresolved what they believe is the key question raised by the lawsuit — that is, Does use of the name ‘Kona’ on packages of coffee containing little, if any, coffee actually grown in Kona violate federal and state consumer protection and fair marketing laws?”

HB144 HD1

On Tuesday, March 5, the Hawaii State Legislature passed a bill (HB144 HD1) upon its third reading in the State House. The bill calls for coffee products labeled as Kona to contain at least 51 percent Kona coffee. Additionally, it would require that all coffee blends containing Kona must state the regional origins of all coffees in the blend, plus the percentage by weight that each coffee represents. The bill is currently being reviewed by two Senate subcommittees.

Similar bills have been introduced to the Hawaii legislature over the past decade, yet none to this point have been signed into law. In the House, numerous legislators noted reservations in supporting the bill.

Although he was one of numerous state reps to introduce the bill, Bob McDermott (R) announced a dissenting vote, describing the bill as a “turf war” in which the legislature should not be involved.

“The reason they don’t use 51 percent now is because Kona coffee is just prohibitively expensive,” McDermott said. “It’s $12, $14 dollars a pound, I don’t know. But it’s very expensive so they blend it and thereby blending it they sell more coffee as a Kona blend. This is kind of a turf war which we’re getting engaged in, and then we impose these labeling restrictions which are meaningless when we [export the coffee] to California or Japan or other places like that because we can’t compel them to follow our laws.”

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The lawsuit plaintiff Corker provided written statements at that hearing in support of the bill that suggested the current lack of labeling requirements — whether for Kona or any other Hawaiian-grown coffee — are misleading to consumers.

“Even if the Committee were to see the label changes as an issue, the matter could be easily addressed by adding a provision to give an option to blenders to use a broader disclosure of the total percentage of non-Hawaii coffee in the package,” Corker’s statement read, in part. “For example, ’51 percent Ka’u Coffee; 49 percent Imported, Non-Hawaii-grown Coffee.’ What is important is that consumers be clearly advised that while the package may carry a name such as ‘Ka’u Blend,’ that up to 49 percent of the package content is foreign, imported coffee.”

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