Traverse City Record-Eagle

Business

February 21, 2013

Feds announce charges in Chinese honey import case

BALTIMORE (AP) — Five people and two companies have been accused of flooding the market with cheaper honey from China and avoiding $180 million in duties, federal officials said Wednesday.

The Chinese honey was declared as other commodities and shipped through other countries to the United States to avoid anti-dumping duties, Immigration and Customs Enforcement officials said.

Two of the nation’s largest honey suppliers have also agreed to pay fines. Baytown, Texas-based Honey Holding agreed to pay $1 million and Onsted, Mich.-based Groeb Farms agreed to pay $2 million in fines, federal officials said.

An undercover agent posed as the director of procurement at Honey Holding, which cooperated in the investigation dubbed “Project Honeygate.” The probe was jointly announced by U.S. Customs and Border Protection officials.

ICE Deputy Director Daniel Ragsdale said such schemes force legitimate importers and the domestic honey industry to endure years of unprofitable operations that put some out business.

“We will continue to enforce criminal violations of anti-dumping laws in all industries so American and foreign businesses all play by the same rules,” Ragsdale said.

Three honey brokers, the former sales director for Honey Holding and an executive with a Canadian broker and distributor were charged.

Groeb Farms said in a statement the company takes full responsibility and regrets any errors made in honey importing, noting the allegations primarily involved two former senior executives. The company said the executives were responsible for purchasing and misled the company’s board, customers and public. The company also noted that federal officials have not alleged any violation of food safety laws by Groeb Farms.

A telephone call and email to Honey Holding was not immediately returned.

The Commerce Department determined in 2001 that Chinese honey was being sold in the United States at less than fair market value and imposed anti-dumping duties as high as 221 percent of the declared value, the agencies said in a statement.

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