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In evading tariffs, Chinese producers pour inferior honey into U.S.

BEIJING — Businessman Yan Yong­xiang was trying to get around stiff U.S. levies on imports of cheap Chinese honey. So he sent 15 shipping containers of cut-rate honey to the Philippines, where it was relabeled and sent to the United States.

It's called honey-laundering, and the subterfuge let Yan skirt $656,515 in taxes before he was caught and pleaded guilty. Yan's factory in central China's Henan province even filtered the metals and pollen from the honey so that U.S. tests would not show it came from China. Now he awaits sentencing in a U.S. jail.

Honey-laundering is just one of many unsavory practices that have besmirched China's vast honey industry and raised complaints from competing American beekeepers. China produces more honey than anywhere else in the world, about 300,000 metric tons (660 million pounds) a year, or about 25 percent of the global total. But stocks are tainted with a potentially dangerous antibiotic and cheaper honeys are increasingly getting passed off as more expensive varieties.

In June, the U.S. Food and Drug Administration seized 64 drums of Chinese honey tainted with chloramphenicol, an antibiotic, at a warehouse in Philadelphia. The drug is banned in food products because in rare cases it can cause aplastic anemia, a potentially fatal illness.

Experts say quality problems are hard to avoid in a business dominated by small manufacturers, many of whom are poor and uneducated.

Peter Leedham, managing director of the Suzhou, China, office of the food-testing company Eurofins Technology Service, says many Chinese beekeepers are untrained and unknowingly give their bees chloramphenicol.

"A lot of the honey farmers or honey collectors here are small businesses or even families, and they do it basically to supplement income," he said. "They often will be told to add this wonderful mixture to whatever they are doing because it will help improve their yields. And they are not told what's in it by the sellers or what it does."

U.S. Sen. Charles Schumer of New York has called for a federal standard for pure honey similar to guidelines already established for olive oil to help combat fakes or blends.

Honey fraud and honey-laundering are part of a controversial debate over whether the United States needs heavy subsidies to protect its homegrown honey industry.

Eric Mussen, an apiculturist, or bee expert, at the University of California at Davis, said it costs U.S. beekeepers about $1.40 to make a pound of honey, including colony maintenance, transportation to honey production areas, harvesting and packing. Before tariffs, he said, Chinese honey was coming into the U.S. at about 35 cents per pound.

"Obviously, this is not a 'level playing field,' " Mussen wrote in an e-mail.

Mussen said if the antidumping tariffs were lifted, sales of U.S. honey "would probably drop way off, but not necessarily to zero. Many U.S. beekeepers would go out of business."

In evading tariffs, Chinese producers pour inferior honey into U.S. 06/30/10 [Last modified: Wednesday, June 30, 2010 11:53pm]

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