Firms Settle With U.S. Over Illegal Chinese Honey

22/02/2013 12:00 - 444 Views

Federal prosecutors said that two of the nations largest honey processors bought illegal Chinese imports of the sweetener, avoiding tens of millions of dollars in antidumping duties.

Authorities said Wednesday that Honey Solutions, of Baytown, Texas, and Groeb Farms Inc., of Onsted, Mich., reached deferred prosecution agreements with the federal government over the illegal imports.

Prosecutors also charged five individuals, including four honey brokers, with participating in an alleged scheme that prosecutors say resulted in the evasion of more than $180 million in duties and the sale of honey containing an unapproved antibiotic.

"Schemes like this result in legitimate importers and the domestic honey-producing industry enduring years of unprofitable operations," said Daniel Ragsdale, deputy director for U.S. Immigration and Customs Enforcement.

Prosecutors said Groeb Farms admitted that executives bought illegally imported Chinese honey, which wasn't labeled as coming from China. The company agreed to pay a $2 million fine and put in place a corporate compliance program.

In a statement, Groeb Farms said it regrets past errors and that senior executives who misled the company's board and its customers are no longer employees.

Prosecutors said Honey Solutions agreed to a similar deal, including a $1 million fine, after admitting to illegally buying imported honey and also processing and selling honey with a prohibited antibiotic. The company didn't reply to requests for comment.

The U.S. placed duties on Chinese honey more than a decade ago after officials determined it was being sold at well below market prices. So-called antidumping provisions are put in place to prevent the sales of imports at below-market prices from potentially damaging domestic producers.

Federal officials said there were no findings of illness or other public health consequences associated with the honey.

February 20, 2013, 7:33 p.m. ET

By Mark Peters

Source: online.wsj.com