Capilano, part-owned by media mogul Kerry Stokes, has applied for a gag order to stop a beekeeper from publishing social media posts accusing the listed honey company of selling toxic, imported honey that contains Chinese and Argentine ingredients.
Victoria-based beekeeper Simon Mulvany runs a consumer activist website and social media accounts known as "Save the Bees Australia", where he has made allegations that Capilano is dumping poisonous honey in order to make money.
According to court documents, Capilano and its chief executive Ben McKee have applied for a court order to stop Mr Mulvany from making the allegations, and are suing him for damages and costs. Mr Mulvany has agreed to pull down about 25 social media posts until the Supreme Court of NSW makes a decision.
Mr Mulvany said he ran the campaign because he wanted Capilano consumers to be aware of what they were buying.
"Most disturbingly, Capilano is exporting Capilano honey that's been adulterated and mixed with Chinese honey and selling it back to the Chinese. Australia's reputation has really been affected," Mr Mulvany told The Australian Financial Review.
"We need a country of origin on the honey label so whether it's a blend or not we just need to know what countries are on the label."
Mr Mulvany also said some Capilano honey brands contain harmful pyrrolizidine alkaloids or contain Chinese pollens, or are mixed with honey imported from China and Argentina.
Capilano CEO Ben McKee said the Capilano brand sold in Australia is "100 per cent Australian honey" but Capilano's secondary brand Allowrie is mixed with honey imported from China, Mexico and Argentina because of Australian honey supply shortage. The Allowrie brand products contain a label that says the honey contains both local and imported ingredients.
Mr McKee said while the company wants to resolve the claim through mediation, he was compelled to take Mr Mulvany to court because he ran a smear campaign against the company.
"We were unable to contribute to the conversation and we were unable to defend ourselves. Our side of the story wasn't going to be told and we went to the court as a last resort.
"We were consistently targeted as part of the smear campaign and that's when we took the unfortunate step of trying to resolve it legally," he said.
Capilano is 18 per cent owned by media mogul Kerry Stokes, through the investment vehicle Wroxby. Over the past year the company's share price jumped by more than 25 per cent and was trading at $20.70 on Tuesday.
It is not the first time Mr Stokes and his business associates are linked to a defamation case.
Last month, the former head of Kerry Stokes' Seven Group, Don Voelte, lost his case against the ABC after the jury found, in less than 90 minutes, that the national broadcaster had not defamed Mr Voelte.
In 2014 Mr Stokes also sued a blogger Shane Dowling over a post on his Kangaroo Court of Australia website, which resulted in Mr Dowling being found in contempt of court.
The law firm representing Capilano is Addisons, who also represented Mr Voelte in the case against ABC.
This story first appeared on The Australian Financial Review