December 21, 2007
News Release 07-129
Inv. No. 332-485
Contact: Peg O'Laughlin, 202-205-1819

The competitiveness of the U.S. canned deciduous fruit industry has declined in recent years as its share of the domestic market has fallen, reports the U.S. International Trade Commission (ITC) in its publication Canned Peaches, Pears, and Mixed Fruit: Conditions of Competition Between U.S. and Principal Foreign Supplier Industries.

The industry's share of the U.S. market for canned peaches fell from 88 percent to 82 percent from 2002 to 2006 (the period covered by the report), its share of the U.S. market for canned pears fell from 94 percent to 84 percent, and its share of the U.S. market for canned mixed fruit mixtures fell from 98 percent to 93 percent, according to the ITC report.

The ITC, an independent, nonpartisan, factfinding federal agency, examined the conditions of competition in the U.S. market affecting the industries in the United States, the European Union (focusing on Greece and Spain), China, and Thailand at the request of the U.S. House of Representatives' Committee on Ways and Means.

As requested, the ITC provided information on the industries in major supplier countries, global trade patterns, trade practices and government programs and measures, and the strengths and weaknesses of the major global suppliers. Highlights of the report follow:

• Several factors led to the decline in U.S. competitiveness during 2002-06. First, the U.S. industries did not sufficiently increase their production capacity to meet rising demand for newer forms of packaging, such as plastic cups and jars. A shift in U.S. market preferences to this type of packaging benefitted foreign suppliers, who increased their share of these market segments. Second, increased market power by wholesale and retail buyers, owing to increasing use of private label packs (with the rise supplied mainly by imports), further eroded the domestic market share. Third, foreign suppliers, particularly Thailand and China, use facilities that produce a variety of canned food products, which spreads fixed costs across more products and lengthens production cycles, thus lowering their unit costs. Finally, lower input costs, mainly for raw fruit and labor, both in established and in emerging competitor supplier countries have lowered prices.
• World canned peach production decreased by more than 10 percent during 2002 06. Leading producers included the EU (mainly Greece and Spain), the United States, and China. The decrease in production mirrored production variations in the United States and Greece and was driven by weather-related conditions, a decline in consumption, and industry consolidation. The EU (mainly Greece) and China together accounted for nearly one-half of the total value ($400 million) of global exports of canned peaches in 2006. Greece has been a longstanding leading exporter, while China has emerged in recent years.
• World canned pear production fluctuated during 2002 06, reflecting weather-related conditions and consolidation in the traditional leading producing countries of the United States, the EU, Australia, and South Africa. China and Thailand emerged as significant producers during the period. Global canned pear exports increased by 68 percent in value during the period under review, as production declines in major consuming markets were replaced by supplies from emerging producers. Principal exporters included the United States, China, and Australia. Exports from China increased substantially during the period under review.
• World production of canned fruit mixtures declined irregularly during 2002-2006, generally following the trend in U.S. production. Principal producers included the United States, the EU, Australia, and China. Significant increases in production were registered by China and Thailand during the period. Principal exporters included Thailand, the EU, and the Philippines.

Canned Peaches, Pears, and Fruit Mixtures: Conditions of Competition Between U.S. and Principal Foreign Supplier Industries (Investigation No. 332-485, USITC Publication 3972, December 2007) will be available on the ITC's Internet site at http://hotdocs.usitc.gov/docs/pubs/332/pub3972.pdf. A CD-ROM of the report may be requested by calling 202-205-2000 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public unless they are classified by the requester for national security reasons.