August, 1999

U.S. launches apple juice anti-dumping investigation

by Lee Dean

The U.S. Department of Commerce on June 28 formally initiated its dumping investigation of apple juice concentrate imports from the People's Republic of China, in response to a complaint filed by the U.S. apple industry on June 7.

Also on June 28, the U.S. International Trade Commission (ITC) conducted a preliminary hearing in Washington, D.C., at which members of the U.S. apple industry presented evidence of the economic injury being suffered by domestic concentrate producers as a result of cheap imports from China.

"As a representative of both apple growers and concentrators, I want you to know that this case is critically important to our entire industry," testified Kraig R. Naasz of the U.S. Apple Association (USApple) at the ITC hearing. "I am here to plead our case and to ask your favorable consideration of this dumping complaint against apple-juice concentrate imports from China."

The dumping complaint alleges that China is selling apple juice concentrate in the United States at prices 91% below its cost of production, and that the U.S. domestic industry is being economically injured as a result.

"Prices of dumped concentrate from China have fallen by about half, even as import volumes and import market share have registered astounding increases," reported Tom Hurson of Tree Top, Inc. "At the same time, our financial bottom line, which was previously a fairly good one, has suffered dramatically."

Concentrate imports from China increased by 1,200% between 1995 and 1998, during which time prices for Chinese concentrate fell by more than 50%. As a result, prices for U.S. concentrate have dropped by 50% since 1995.

"I would have to say that one of my biggest mistakes was Coloma's decision to invest in a concentrator three years ago," stated Alton Wendzel of Coloma Frozen Foods. "Unfortunately, I made this decision just before imports of apple juice concentrate from China began to explode. Because of these imports, our concentrator is currently operating at but a small fraction of its capacity."

If the Department of Commerce finds that concentrate is being sold at unfairly low prices, and the ITC rules that the imports are a cause of economic injury to the domestic industry, additional tariffs will be levied against Chinese concentrate imports.

"Until recently we owned and operated a concentrate production facility," testified Ken Guise of Knouse Foods Cooperative. "To our dismay, the massive increase in dumped concentrate from China, that has occurred over the past few years, forced us out of the concentrate business."

The ITC is required to issue its preliminary injury determination by July 22. The Department of Commerce is required to announce its preliminary dumping decision in October, at which time antidumping duties may be imposed on imported Chinese concentrate.

The antidumping initiative is being overseen by the Coalition for Fair Apple Juice Concentrate Trade (FACT), an industry-wide coalition of state apple associations, processors and concentrators administered by USApple.

FACT also received financial support from state departments of agriculture in Washington, Virginia, Pennsylvania and Michigan. Testifying at the ITC hearing on behalf of the U.S. apple industry were the following: Naasz, president and CEO, USApple, McLean, Va.; Kenneth Guise, CEO, Knouse Foods Cooperative, Inc., Peach Glen, Pa.; Thomas Hurson, vice-president for finance, Tree Top, Inc., Selah, Wash.; Alton Wendzel, president, Coloma Frozen Foods, Inc., Coloma, Mich.; Thomas R. Graham of Skadden, Arps, Slate, Meagher & Flom, LLP, Washington, D.C., represented the U.S. petitioners at the hearing. Bruce M. Mitchell of Grunfeld, Desiderio, Lebowitz & Silverman, Washington, D.C., represented the respondents, seven Chinese apple juice concentrate producers, at the hearing.

The Fruit Growers News