Ontario apple growers prepare dumping complaint

Wednesday, June 3, 2015

by SUSAN MANN

Ontario apple growers are starting to gather evidence of the American apple industry’s sales of red and golden delicious apples in the provincial market at below the U.S. cost of production.

Charles Stevens, chair of the Ontario Apple Growers, says the organization is just beginning to compile proof and find partners across Canada to participate in a formal dumping complaint against American apple growers.

“We haven’t got the proof 100 per cent yet,” he says. “We have to get it on paper.”

Stevens notes in the 1980s the Canadian apple industry brought a dumping complaint against the American apple industry’s dumping of delicious, red and golden delicious apples into the Canadian market.

Crosby Mitchell, former statistician with the defunct Ontario Apple Marketing Commission, says that was one of two cases of dumping Canadian farmers brought against the American industry involving delicious, red and golden delicious apples. The other was in the late 1990s.

The Ontario government dissolved the apple marketing commission in 2001. In 2004, the Ontario Apple Growers was formed and it’s now the organization representing the province’s apple growers.

Mitchell says in both cases Canadian farmers proved the Americans’ dumping was causing injury to their industry and the Canadian government established a “normal value” for delicious, red and golden delicious apples. “That was the value that the apples had to be sold for. No apples came in below that price.”

Mitchell doesn’t recall what the actual amount was in the cases but remembers “it was a good price.”

“Dumping is not illegal,” Mitchell notes. It’s the “causing injury to an industry in another country” that’s illegal. “That’s what you have to prove.”

Five years after each decision to establish a normal value was implemented and used, the Canadian government reviewed each one. The normal value was dropped after growers lost their case for it to continue.

Brian Gilroy, chair of the Canadian Horticultural Council’s apple working group, says getting proof the Americans are dumping apples into the Canadian market is difficult.

For example, Ontario retail buyers may pay $18 per bushel but get $14 per bushel back in rebates. “They (the seller) would call it an advertising incentive or volume discount or whatever,” he explains.

American’s selling apples for about $4 to $5 per bushel will just cover the packaging costs but not the apples and costs of the product’s movement through the packinghouse. “It’s well below their cost of production,” he says.

“We’re in the process of gathering the proof now as far as price comparisons and volume of movement,” he adds.  

Ontario is the second largest export destination for Washington State apples and the state had a record crop last fall. This year Washington State is three weeks ahead of normal and the crop is going to start being harvested in early to mid-August, Gilroy notes.

He says the Ontario apple industry is once again being injured by the Americans’ dumping of red and golden delicious apples in the provincial market. “They’re selling apples cheaper than they were back then,” he says, referring to the 1980s and 1990s.

While the dumping is concerning, Stevens says of more immediate concern is the impact of frost on the province's apple crop. It's too early to tell the extent of the damage, he says, estimating they will know better by the end of the month.

In 2014 Ontario produced an average-sized apple crop of 7.3 million bushels. BF