Commerce Department Initiates
Antidumping Duty Investigations
on Imports of Lemon Juice
from Argentina and Mexico
October 17, 2006
Washington, D.C. (October 13, 2006) – The U.S. International Trade Commission and the U.S. Commerce Department have initiated antidumping duty investigations on imports of lemon juice from Argentina and Mexico. The petition, filed by Sunkist Growers, alleges that these imports are being sold in the United States at unfair prices, below both their own third country prices and their own cost of production, causing material injury to the domestic U.S. lemon juice industry.
Testifying on behalf of Sunkist before the U.S. International Trade Commission hearing panel were Frank Bragg, Vice President of Citrus Juice and Oil Division; Eric Larson, Director of Sales and Marketing for that division; and Amy Warlick, economist with Barnes, Richardson and Colburn. Matthew T. McGrath with Barnes, Richardson & Colburn in Washington, DC, is serving as counsel to Sunkist on this matter. Also testifying in support of petitioner was William Borgers, President of Ventura Coastal, LLC, an independent juice processor.
Sunkist, which accounts for the majority of lemon juice produced in the U.S., is a marketing cooperative, owned by 6,000 grower-members in California and Arizona. "For the past three years, imports of lemon juice have been entering the U.S. in increasing volumes and at declining prices, to the point of unprofitability," said Mike Wootton, Sunkist's Senior Vice President for Corporate Relations. "The vast expansion of lemon groves in Argentina and increased acreage in Mexico have pushed their lemon juice inventories to unsustainable levels and the resulting output has nowhere to go except into targeted foreign markets, like the U.S. – at whatever price it can bring.
"The U.S. market price for Argentine and Mexican imports has declined to a fraction of its level of five years ago. Sunkist cannot fulfill its mission of returning profits, if Mexico and Argentina continue to dump their lemon juice here."
The U.S. lemon juice industry's financial condition has dropped from nominal operating profit to a significant loss, Wootton added. U.S. producers have lost significant sales volumes. U.S. inventories have increased dramatically and related U.S. employment has declined. Antidumping duties will remedy the situation by offsetting the unfair price advantage gained by these imports, and permit U.S. producers to compete again on a fair market price level.
The scope of the antidumping investigations includes lemon juice destined for use as an ingredient in the production of other products. Lemon juice already packaged for sale in retail containers and beverage products such as lemonade that typically contain 20% or less lemon juice as an ingredient are excluded.
The investigation is conducted simultaneously by two federal agencies: the U.S. Department of Commerce, International Trade Administration (ITA), and the U.S. International Trade Commission (ITC). The ITA determines whether to initiate the investigation, and if, and by what margin, the foreign producers are selling lemon juice for export to the United States at less than fair value prices. The ITC is charged with determining whether the subject imports are causing or threatening to cause material injury to the domestic industry.
The antidumping duty, if assessed, will not result in increased prices to consumers. Lemon juice accounts for only a small portion of the consumer beverages in which it is used. For example, it constitutes no more than 15 percent of the volume of lemonade, one of the predominant uses of bulk lemon juice, so an antidumping duty should have no noticeable impact to the consumer price level.