One of the hardest issues the state Legislature took on this year was to bring truth in labeling to packages featuring one of Hawaii’s most renowned and high-value crops.

So perhaps it was fitting that passing the legislation centered around the world’s hardest nut proved to be a real tough problem to crack.

Hawaii lawmakers sent a bill to Gov. Josh Green that, if enacted, would disclose to consumers, starting Jan. 1, 2026, whether macadamia nuts grown in Hawaii are actually in some packaged foods that suggest the nuts are locally grown.

But House Bill 2278 won’t apply to several confections, including one of the best-known that originated in Hawaii: chocolate-covered macadamias.

Several lawmakers described HB 2278, the final version of which was crafted out of public view in the waning days of this year’s legislative session, as a compromise balancing competing stakeholder interests.

Those stakeholders were largely Hawaii macadamia nut growers and small processors who wanted broad application of fair labeling, and a kamaaina company that claims to produce more premium chocolate- covered mac nuts than anyone else in the world.

State Rep. Kirstin Kahaloa (D, Captain Cook-Kealakekua- Kailua-Kona) noted for colleagues that over 2,000 pages of written testimony on the bill were submitted and that a consensus was reached with key senators to produce the bill’s final draft.

“I honestly didn’t believe this would be possible this session,” she said on the House chamber floor moments before she and her colleagues passed the bill in a 50-1 vote.

The vote in the Senate, where Senate President Ron Kouchi (D, Kauai-Niihau) described the bill as “tricky,” was 25-0.

State Sen. Tim Richards (D, North Hilo-Waimea-North Kona) urged his colleagues to vote for the measure. “The stakeholders came to the table,” he said. “Both our processors and our farmers tried to seek through and find that common ground to get this passed.”

Old grievances

There have long been complaints within the industry that some local mac nut product makers put imported nuts into their packages while suggesting the contents are Hawaii-grown.

“It’s a real hot issue,” Jim Maka, then-administrator of the measurement standards division at the state Department of Agriculture, said in 1991 when improper labeling was estimated at 10% to 15%.

That year, the Legislature passed a bill that established a law prohibiting packaging that proclaims mac nuts were grown in Hawaii if any of the nuts were not.

The 1991 “grown in Hawaii” macadamia law, however, doesn’t prohibit products from suggesting with imagery and Hawaii place names that nuts in a package were grown in Hawaii.

Richard Cohen, current Department of Agriculture measurement standards branch manager, told lawmakers in 2023 that farmers in recent years became more concerned with increasing foreign macadamia use in Hawaii-branded products hurting crop prices and sales.

According to the National Agricultural Statistics Serv­ice, the value of Hawaii’s macadamia crop, largely from Hawaii island, tanked from $62 million in 2021 to $33 million in 2022 and $31 million in 2023 due to price and volume declines.

Hawaii is the fifth-largest producer of macadamias in the world after Australia, South Africa, China and Kenya, according to the Hawai‘i Farm Bureau.

Concern for the industry led to a bill introduced in 2023 to require disclosing the origin of mac nuts in products produced in the state if packaging, including words or images, suggests the nuts are from Hawaii.

The 2023 bill, HB 1348, stalled when state Sen. Jarrett Keohokalole, chair of the Senate Committee on Commerce and Consumer Protection, decided against holding a hearing on the bill in part because of opposition to the measure that almost entirely came from Hawaiian Host Group and its employees.

New face-off

This year Hawaiian Host squared off against HB 2278, which initially was similar to 2023’s bill and drew Department of Agriculture support.

Farmers and small processors testified that large-scale importing of mac nuts by Hawaiian Host has depressed prices for Hawaii’s crop and forced some farmers to get out of the business or leave nuts unharvested.

“A lot of growers are at the brink of not being able to make it anymore,” Andrew Trump, a second-­generation Hawaii mac nut farmer with Island Harvest Inc., told the House Committee on Consumer Protection and Commerce during a Feb. 14 hearing. “And one of the greatest threats to this is misleading labeling.”

Hawaiian Host, which makes its macadamia nut products in Hilo and Honolulu under the Hawaiian Host, Mauna Loa and KOHO brand names, acknowledged that it uses cheaper foreign nuts in its products, but in response to a question at one hearing would not disclose how much.

With Hawaii roots going back to 1950 on Maui, Hawaiian Host claims to be the first maker of chocolate-­covered macadamia nuts and has trademarked the phrase “Hawaii’s gift to the world” it uses on packaging.

Products from the company feature imagery of Hawaii and phrases that include “taste of the tropics,” “island macs,” “flavors of aloha” and “macadamia powered paradise.”

In testimony at the Legislature, Hawaiian Host contended that it is already the largest buyer of Hawaii mac nuts but that a lack of local processing capacity limits the volume it can buy.

Company officials also warned lawmakers that if the then-pending draft of the bill became law, it might establish a production facility outside Hawaii to make products that wouldn’t be subject to the proposed truth-in-labeling law covering only products made in the state.

“We have seen this movie before, when companies and jobs are forced to leave Hawaii to remain competitive,” Ed Schultz, Hawaiian Host president and CEO, said at the Feb. 14 hearing.

Schultz also said the company wants to develop a cooperative processing facility that would enable the company to buy more Hawaii mac nuts.

“We want to grow the industry for all — growers, processors, branded food companies,” he said. “However, we must focus on investment and not on bills that pit one side of the industry against the other.”

Compromise

HB 2278, with broad truth-in-labeling language, was up for a final vote in the Senate on April 9 after clearing the House on a 48-1 vote. But Keohokalole (D, Kaneohe­- Kailua) convinced fellow senators to change the bill’s effective date from July 1 to July 1, 2040.

The move by senators led to a conference committee of House and Senate representatives, including Keohokalole, negotiating more changes to the bill that received final approval May 1 in the House and Senate.

In addition to a Jan. 1, 2026, effective date, the final draft excluded mac nut products containing ingredients other than seasonings and flavorings.

The final draft states that the exclusion applies to products where the “main” product is not macadamias, including candies, cookies, milk, ice cream and other things.

So the bill, as is, essentially applies only to flavored or plain roasted or raw nuts.

Another change made by the conference committee eliminated a requirement in the bill’s original draft that countries of origin and the amount of foreign nuts be listed on the principal display panel of a package.

The final draft only requires that packages with foreign nuts have a statement somewhere on the package that says, “This product contains macadamia nuts grown outside Hawai‘i.”

Schultz, in a statement, said Hawaiian Host supports the bill that was passed as a good compromise.

“The bill provides transparency for consumers and helps move the Hawaii macadamia industry forward,” he said.

Schultz also said the company will work to increase nut processing capacity for Hawaii to compete in the global macadamia industry.

Jeff Clark, president of Hamakua Macadamia Nut Co., which grows mac nuts and sells products with 100% Hawaii-grown macadamias, called the passage of HB 2278 a positive step forward to help protect farmers, although more protection is still desired.

“We will continue to push for truth in labeling all ma­cadamia nut products, so consumers are educated on where products are grown,” he said in a statement.

Brad Nelson, director of the Macadamia Growers of Hawai‘i trade association, encouraged the governor to sign the bill.

“This is a major step forward to save Hawaii’s macadamia nut industry from going under,” he said in a statement. “This has been a long, hard-fought battle.”