PIP COURTNEY, PRESENTER: Dairy may still be the darling of New Zealand agriculture, but there's a growing buzz about gold - liquid gold.

Producers of Manuka honey believe their product's antibacterial properties could within years underpin an annual export business worth more than a billion dollars.

But first, the industry needs to stop fake Manuka honey and it's enlisted a Queensland scientist to help.

If successful, there could be lucrative spin-offs for Australia.

National regional reporter Dominique Schwartz reports.

DOMINIQUE SCHWARTZ, REPORTER: The central North Island of New Zealand is dairy country. Here, the cow is king.

But there's another business on the block which is creating a global buzz - honey.

SONG: # Honey, honey How you fill me # Ah-hah, honey, honey. #

DOMINIQUE SCHWARTZ: While all honeys have their fans, there's one which has taken the world by storm. Not for its taste, but its medicinal qualities.

MOIRA HADDRELL, MANUKA PRODUCER: Manuka is a unique honey to New Zealand. There is a little bit in Australia, but predominantly here in New Zealand, and its key component is that it has antibacterial qualities and it's unique. There is no other honey in the world at this stage that seems to have those similar properties.

DOMINIQUE SCHWARTZ: Moira Haddrell runs the export arm of the family honey business at Cambridge, a two-hour drive south of Auckland. She and husband Richard began 20 years ago with a handful of hives. They now have 3,000 of them - about 150 billion bees.

They still produce various clover and multi-floral honeys, but the family's sweetest business by far is Manuka, a honey they once couldn't give away.

MOIRA HADDRELL: When we started 20 years ago, it wasn't regarded at all. In fact, people didn't like it and we were cutting the comb out of the beehives and feeding it to the cows. We just couldn't give it away, we couldn't sell it. Nobody wanted it.

Today, it's the most sought-after product that we can produce. We honestly can't produce enough Manuka honey for each year.

We have people, they literally fly into Auckland airport, they hire or even buy a car and they drive to here in Cambridge and they pull up in the driveway and they want to buy every pot of honey that we have to take back to China or Hong Kong or wherever they come from.

DOMINIQUE SCHWARTZ: One party was determined not to leave empty-handed.

MOIRA HADDRELL: When I said thank you, but no thank you, because we didn't have what they wanted or could supply, they actually came back 20 minutes later and offered to buy the entire company.

DOMINIQUE SCHWARTZ: How much were they offering?

MOIRA HADDRELL: Oh, millions. Lots of it. But...

DOMINIQUE SCHWARTZ: You weren't tempted?

MOIRA HADDRELL: For about two seconds. I have to confess, it was a big figure.

DOMINIQUE SCHWARTZ: Bees make Manuka honey from the nectar of Leptospermum scoparium, the Manuka bush, which grows wild across New Zealand.

Its unique active ingredient methylglyoxal fights bacterial infections. Hospitals use the most bioactive Manuka for wound dressings and a growing body of research points to manuka's general health and beauty boosting properties.

Novak Djokovic is just one of Manuka's growing band of devotees. Others who swear by its benefits include film star Gwyneth Paltrow.

GWYNETH PALTROW: When I first heard that I was gonna be on the cover of People's Most Beautiful issue I honestly thought someone was playing a joke on me.

OZZY OSBORNE SONG: # Life won't wait for you my friend. #

DOMINIQUE SCHWARTZ: And Ozzy Osborne. Not the poster boy for good health, but hey, the hard-living rocker's still alive.

Once a humble bush honey, Manuka is now liquid gold.

MARK HARVEY, MANUKA PRODUCER: The demand from people who've got money is insatiable.

Mark Harvey is the general manager of Happy Valley. It bottles 15 times the amount of honey it did six years ago and exports to the US, Europe and Asia.

MARK HARVEY: In 2008, when I got involved, we pretty much were a boutique company and the production was about 15 tonne of honey. Today, we're packing around about 225 tonne of honey.

DOMINIQUE SCHWARTZ: As well as producing honey themselves, they bottle for other suppliers.

MARK HARVEY: Today, we're bottling for another contract customer and this honey here is going to China. This order is 12 tonne of honey, so it will comprise of around about 12 pallets of New Zealand honey going to China.

DOMINIQUE SCHWARTZ: The higher the antibacterial activity of the honey, the higher the price.

This batch is worth about $20 a kilo. But honey with a unique Manuka factor rating of UMF 20.

MARK HARVEY: By the time it's packed, it's probably around $150 a kilo export.

DOMINIQUE SCHWARTZ: And as much as $300 a kilo in shops overseas.

MARK HARVEY: I think eventually this jar of honey might become too expensive for the normal consumer and it's gonna be graded as medical.

DOMINIQUE SCHWARTZ: So the future for Manuka is not spreading it on your toast, it's spreading it on your wound?

MARK HARVEY: I think so, yeah.

DOMINIQUE SCHWARTZ: Dr Peter Brooks from the University of the Sunshine Coast says the potential of Manuka honey is huge.

DR PETER BROOKS, SUNSHINE COAST UNIVERSITY: We could imagine it becoming the last defence against some bacteria. So where you've got recalcitrant wounds, for example, with methicillin-resistant golden staph, what we could do is treat those wounds with honey and clear the infection, not using the antibiotics that the bacteria are becoming resistant to.

DOMINIQUE SCHWARTZ: But not all honey sold as Manuka is the real deal. As with any gold rush, this one has attracted its fair share of cowboys and crooks. Fraud has flourished.

DR PETER BROOKS: It's massive overseas, in that there's probably two or three times more Manuka honey being sold in the international market than is actually being produced here in New Zealand. So it's a case of somebody taking a $5 honey and selling it again on for $50, saying that it's a Manuka.

What that's doing, that's destroying the reputation for the beekeepers that are producing the genuine article and also reducing their returns.

(Peter talking to Terry Braggins)

DR TERRY BRAGGINS: Hello, Peter. How's the run going?

DR PETER BROOKS: Hello, Terry. Oh, it's looking quite strong here. So we're getting fairly strong leptospermum showing up.

DR TERRY BRAGGINS: This one here?

DR PETER BROOKS: Yep, that's the one.

DOMINIQUE SCHWARTZ: Dr Brooks is working with New Zealand scientist Dr Terry Braggins. They've been commissioned by concerned UMF producers to develop a chemical fingerprint for Manuka honey.

DR PETER BROOKS: We're looking for unique compounds in the honey that come out of the nectar, so we can trace it back to the floral source. So that when you hold another honey up to it, if there's something mismatching from a different floral source, we can pick it out as not being true to type.

DOMINIQUE SCHWARTZ: The aim is to develop a simple test which could be used by importers and sellers to confirm that honey IS true to label.

DR PETER BROOKS: It's a good Manuka, this one.

DR TERRY BRAGGINS: Yes, it is.

DR PETER BROOKS: Yeah.

DOMINIQUE SCHWARTZ: Happy Valley is one of the producers bankrolling the scientific research.

Marketing manager Narissa Harvey says customers in their factory shop can trust that they're getting what they pay for.

CUSTOMER: Nice.

DOMINIQUE SCHWARTZ: But once the honey leaves their property, it could be a different story and a simple authenticity test would offer valuable protection against fraudsters.

NARISSA HARVEY, MARKETING MANAGER, HAPPY VALLEY: That's our livelihood and it's a resource that has only a finite amount. So we definitely need to make sure that we protect what we're selling and that other people can't sort of continue to rip off Manuka honey.

DOMINIQUE SCHWARTZ: So, do you love these guys?

RICHARD HADDRELL, MANUKA PRODUCER: Yeah. They are good. This is the best part about beekeeping. All the politics and stuff, we don't like.

DOMINIQUE SCHWARTZ: Back in Cambridge, Richard Haddrell is checking on his young queens and lamenting the cutthroat nature of beekeeping today.

RICHARD HADDRELL: The opportunists, they haven't got a love for keeping bees and making honey. They're just in it for the money.

DOMINIQUE SCHWARTZ: He says the fierce competition for Manuka honey has fuelled fights over territory and hive placements. Theft and vandalism is rife. The Haddrells recently had 23 hives stolen.

RICHARD HADDRELL: Yeah, there's some crazy stuff. People kicking over people's hives and poisoning other people's hives, stealing hives. Um... fights going on over land. Then there's the landowners fighting with landowners that are next-door neighbours. Yeah, it's a bit crazy.

DOMINIQUE SCHWARTZ: The insatiable demand for Manuka has also opened up new horizons.

Most beekeepers get Manuka honey by placing their hives near Manuka trees in the wild. But here at Whakatane, on the east coast of the North Island, Maori investors are experimenting with a Manuka plantation.

JEREMY GARDINER, MANUKA BIOACTIVES: I think generations of New Zealand farmers are probably turning over in their graves. I think generations of farmers have chopped, burnt, sprayed Manuka to get rid of it and now we're talking about going and planting Manuka and not just planting Manuka, but planting intensively.

So we've got 5,300 trees which were planted this year. They're flowering, but we'll collect honey next year.

DOMINIQUE SCHWARTZ: Jeremy Gardiner is the managing director of Manuka Bioactives.

The Maori-owned company aims to harvest not only Manuka honey, but also the oil from the leaves to use in anti-ageing and dermatological products.

JEREMY GARDINER: So from an oil point of view, we can plant the trees in a way that we can harvest them easier than in the wild and from a honey point of view, we're able to get more trees per hectare and create more flowers per tree and therefore produce more honey.

DOMINIQUE SCHWARTZ: The early signs are promising. The plantation began two years ago with 27 different strains of Manuka. The company has already identified the best seven or eight producers.

How's the plantation working out?

BEEKEEPER: Yeah, awesome. As you can see, the bees are loving it. There's bees on pretty much every tree as we walk along the aisles and the flow's really starting to come in now. Looks fantastic.

DOMINIQUE SCHWARTZ: Can you see a difference working in a plantation situation?

HONEY COLLECTOR: Yeah, it's certainly a lot more intensified through here, so you know, the flow seems to be a lot better because of that. But you know, time will tell.

DOMINIQUE SCHWARTZ: Manuka plantations may well be the way of the future.

The Haddrells have just planted 18,000 trees on their block in Cambridge.

Dr Brooks says honey producers in Australia should take note of developments across the ditch.

DR PETER BROOKES: Manuka honey is a class of leptospermum honey. We have manuka in Tasmania as well and we have jelly bush in mainland Australia that's showing the same activity. New Zealand's got in early and they've got the science and the research. They've shown the activity and that's where the recognition has come in for wound treatment and for market recognition.

Australia hasn't done that, so we've got to catch up by doing our own research to show that our leptospermum honeys are as active, not competing in the same marketplace, but being recognised for being Australian leptospermum honeys.

MIKE HOWES, JELLYBUSH PRODUCER: Just gonna give the bees a bit of a smoke, pacify them and then open it up and I'll show you some of the jelly bush honey.

DOMINIQUE SCHWARTZ: The potential of jelly bush honey has already been recognised by a handful of Australian producers, among them Mike Howes.

MIKE HOWES: Yeah. Smell that. That's specifically a leptospermum smell. Australia's Manuka.

DOMINIQUE SCHWARTZ: The expat New Zealander has been in the jelly bush business for the past four years.

MIKE HOWES: This honey's all packed and sealed and in here is the jelly bush honey.

DOMINIQUE SCHWARTZ: The liquid gold.

MIKE HOWES: Liquid gold. That's right.

DOMINIQUE SCHWARTZ: This year he'll harvest between 15 to 20 tonnes of honey and sell it for as much as $40 a kilo, eight times what a non-active honey might earn.

(Tasting the honey) Mmm. It's delicious. It's very sweet, isn't it?

MIKE HOWES: Great taste.

DOMINIQUE SCHWARTZ: Sweeter than Manuka. But still with that bitter sort of aftertaste.

MIKE HOWES: Aftertaste, yeah.

I think there's a growing demand, because New Zealand can't meet the world demand at the moment. We have a lot of inquiries into our jelly bush honey.

DOMINIQUE SCHWARTZ: And you export already?

MIKE HOWES: We're exporting already, yes, into Japan, Saudi.

DOMINIQUE SCHWARTZ: What about China?

MIKE HOWES: China's definitely a market.

DOMINIQUE SCHWARTZ: With vast tracts of jelly bush in the coastal forests of northern New South Wales, the earning potential is huge.

This is where the bees collect their nectar, about half a kilometre from the hives. In this section of track alone, there are four types of leptospermum, three of which have bioactive properties.

So far, scientists have identified more than 80 different species of jelly bush, at least seven of them with antibacterial properties similar to Manuka.

Mike Howes says developing a chemical fingerprint for leptospermum honeys will benefit Australia's fledgling industry and the consumer.

MIKE HOWES: Just because of the high amount of money that's being paid for it, there's always a chance that people might adulterate the product. So it's a great thing that we can be certain that what you're getting is the real thing.

DOMINIQUE SCHWARTZ: And if it helps to prevent Australia's version of New Zealand's Manuka wars, even better.

MIKE HOWES: The jelly bush wars. It could well happen.

PIP COURTNEY: Dominique Schwartz there.