2022 Processed Foods Report

Brent Danielson
Schreiber Foods International

As this report was about to be written, the obvious subject seemed to be the supply chain issues and their impact on member companies within the section. But then an antidumping duty petition was filed on preserved mushrooms from Poland, the Netherlands, Spain and France. If that wasn’t enough, the very next day another antidumping (and countervailing) duty petition was filed on white grape juice concentrate from Argentina.

These filings include ridiculously short deadlines that U.S. importers of the product and their suppliers in the country(ies) in question must meet as well. The entire process reeks of protectionism – in the U.S. and other countries – and failure to get industry members working together and promptly filing the needed information can be disastrous. By the way, it’s no coincidence these filings were done at a time when many would be out of their office because of school spring break, Easter and Passover.

The Processed Foods Section received two bits of good news in these filings: no AFI members produce or import the grape juice concentrate and the mushroom filing was targeted at retail pack, meaning foodservice suppliers and importers appear to have dodged a bullet – at least for now.

As noted, when petitions are filed, time is of the essence. This process is complicated, so there needs to be a lot of education up front. Even those who’ve gone through the process before with other products need to be walked through the process again. Via AFI, we were able to do just that. Within days of the filing, U.S. mushroom importers and their foreign suppliers were able to listen to presentations from two law firms – to get an understanding of the process and to come to an agreement on which firm to hire. This is not something companies should undertake on their own – even if they have in-house counsel. Working together presents a unified front. It allows companies to share the legal fees, which are reduced for each company via working in the group.

Plus, questionnaires and other information submitted by companies in the group are reviewed by the group’s lawyers and actually submitted by the legal team. These questionnaires are tedious; they take a lot of time to figure out and can be quite confusing. The attorneys go through each group member’s questionnaire to make sure there are no misunderstandings and to ensure confidential information remains confidential. This process also helps provide a unified response. The legal teams immerse themselves in this process and product and having access to the information provided by several importers allows them to question any comments that contradict what others have said. It doesn’t mean they’re going to force the importer to change its wording but if the contradiction is the result of a misinterpretation of the question, it can save lots of headaches for everyone later.

Another key component of antidumping duty proceedings is making certain foreign suppliers fully participate in the process. Any punitive duties levied are paid by U.S. importers, so that’s a key component of the up-front education process for importers and something the association and attorneys will remind us of throughout the ordeal. It’s important suppliers realize that even if they at some point decide to stop selling to U.S. customers, they must provide any requested information for the period being covered in that portion of the investigation. As with importers, it’s best foreign suppliers work together – through a law firm familiar with U.S. antidumping duty law.

As this publication was being sent to the printer, the initial hearing by the International Trade Commission had just been held and the AFI importer group’s legal team was preparing post-conference briefs to reply to points made at the hearing. After that, the importers will clearly move into the background. This becomes an exporter-led process, so the AFI group will cut back on its legal work in favor of supporting any need for assistance expressed by the exporters and their lawyers.

The Processed Foods Section isn’t the only section within AFI dealing with antidumping duty issues. AFI’s National Honey Packers and Dealers Association is dealing with an antidumping duty petition covering five countries. That petition was filed in early 2021, so things are further along than with the mushroom filing.

As I said earlier, having an association in place creates the infrastructure to quickly educate the trade about the issues and create a plan to mount a defense – another example of the value AFI brings to our sector.