Healthy soil and sustainable growing

["Tradingpost" <tradingpost@lobo.net>]

This one's from the Globe and Mail, Montreal

paul tradingpost@lobo.net
______________________

Honey laundering: The sour side of nature’s golden sweetener
http://www.theglobeandmail.com/news/world/honey-laundering-the-sour-side-of-natures-golden-sweetener/article1859410/singlepage/#articlecontent
Wednesday, Jan. 05, 2011 11:30PM EST

As crime sagas go, a scheme rigged by a sophisticated cartel of global
traders has all the right blockbuster elements: clandestine movements
of illegal substances through a network of co-operatives in Asia, a
German conglomerate, jet-setting executives, doctored laboratory
reports, high-profile takedowns and fearful turncoats.

What makes this worldwide drama unusual, other than being regarded as
part of the largest food fraud in U.S. history, is the fact that
honey, nature’s benign golden sweetener, is the lucrative contraband.

Honey has become a staple in the North American diet. Those that do
not consume it straight from bear-shaped squeeze bottles eat it
regularly whether they know it or not – honey is baked into everything
from breakfast cereals to cookies and mixed into sauces and cough
drops. Produced by bees from the nectar of flowers and then strained
for clarity, honey’s all-natural origin has garnered lofty status
among health-conscious consumers who prefer products without refined
sweeteners (think white sugar and processed corn syrup). About 1.2
million metric tons of honey is produced worldwide each year.

What consumers don’t know is that honey doesn’t usually come straight
– or pure – from the hive. Giant steel drums of honey bound for
grocery store shelves and the food processors that crank out your
cereal are in constant flow through the global market. Most honey
comes from China, where beekeepers are notorious for keeping their
bees healthy with antibiotics banned in North America because they
seep into honey and contaminate it; packers there learn to mask the
acrid notes of poor quality product by mixing in sugar or corn-based
syrups to fake good taste.

None of this is on the label. Rarely will a jar of honey say “Made in
China.” Instead, Chinese honey sold in North America is more likely to
be stamped as Indonesian, Malaysian or Taiwanese, due to a growing
multimillion dollar laundering system designed to keep the endless
supply of cheap and often contaminated Chinese honey moving into the
U.S., where tariffs have been implemented to staunch the flow and
protect its own struggling industry.

Also struggling is the country’s agriculturally vital bee population.
A report released Monday found that four previously abundant species
of bumblebee are close to disappearing. The Proceedings of the
National Academy of Sciences documented a 96-per-cent decline in the
numbers of the four species.

Industry insiders began tracking the questionable cargo years ago when
low-priced honey from surprising countries infiltrated the market. But
federal law enforcement officials have only begun to home in.

Savvy honey handlers use a network of Asian countries to “wash”
Chinese-origin product – with new packaging and false documents –
before shipping it to the U.S. for consumption in various forms.

Fifteen people and six companies spanning from Asia to Germany and the
U.S. were recently indicted in Chicago and Seattle for their roles in
an $80-million gambit still playing out in the courts. That case has
been billed as the largest food fraud in U.S. history. But American
beekeepers, already suffering from a bee death epidemic that is
killing off a third of their colonies a year, say the flow of suspect
imports has not let up.

“We see a flood, an avalanche of [laundered] honey continuing,” said
Ron Phipps, a global honey markets expert. “It has created a two-tier
market where cheap, illegal honey … has a huge competitive advantage,”
he said, adding: “It’s really putting the domestic industry on the
verge of crisis.”

At stake is more than just a sweet industry.

Honeybees are responsible for pollinating millions of acres of
agricultural crops, including fruits, vegetables, oilseeds and
legumes, worth $20-billion annually in the U.S. alone. More than a
quarter of the human diet hinges on those crops.

“If we lose our honey industry in the U.S., there’s going to be
massive food shortages like we haven’t seen before,” said Richard
Adee, a South Dakota beekeeper who owns 80,000 honeybee colonies, the
largest operation in the U.S.

Mr. Phipps said the worry is not overblown.

“It’s really an issue, for America, of national security,” he said.
“It concerns the security of the food supply and the ability of the
nation to feed itself.”

Sticky politics

In the honey world, there are two types of countries: producers and
consumers. The United States is one of the largest of the latter,
consuming about 400 million pounds of honey a year. Its beekeepers can
produce only half that amount leaving exporters to fill the rest.
Canada produces about 65 million pounds of honey a year and ships its
surplus, 20 to 30 million pounds, south of the border.

China, the world’s largest producer of honey, would seem a natural
candidate to fill the gap. But Chinese honey is notorious for
containing the banned antibiotic chloramphenicol, used by farmers to
keep bees from falling ill. The European Union outlawed Chinese honey
imports because of it.

Dilution is another issue. According to Grace Pundyk, author of The
Honey Trail, Chinese manufacturers will inject a type of honey with
litres of water, heat it, pass it through an ultrafine ceramic or
carbon filter, and then distill it into syrup. While it eradicates
impurities such as antibiotics, it also denies honey of its essence.

Ten years ago, the U.S. Department of Commerce accused the Chinese
honey industry of dumping cheap product into the American market at
prices well below the cost of production. Canadians also detected
surprisingly low-priced product crossing its own borders.

The spread of inexpensive honey prompted an outcry from local
beekeepers in both countries, most of whom could not compete with the
Chinese players.

In the U.S., a hefty tariff – more than two dollars for every kilogram
of Chinese-origin honey – was levied. But the tax only temporarily
dammed the flow. Official Chinese honey exports to the U.S. fell, but
the country’s honey production capacity increased, according to
statistics collected by the Food and Agriculture Organization of the
United Nations.

“We saw a flurry of honey starting to come into the U.S. from
countries – Indonesia, Malaysia, Taiwan, the Philippines – that had
never been exporters to the U.S. before,” said Jill Clark,
vice-president of sales at Dutch Gold, a honey vendor involved in a
multi-stakeholder effort to stop laundering. “All of a sudden they had
millions of pounds of honey to sell, at very cheap prices.”

Combing a conspiracy

Australian investigators uncovered the roots of a global conspiracy
when they intercepted a large consignment of “Singapore” honey bound
for the U.S. in 2002.

At the time, Singapore didn’t produce honey. The shipment was traced
back to China, opening the first window into a worldwide scheme in
early bloom: The industry had figured out they could launder Chinese
honey through neutral countries able to ship into the U.S. without
paying tariffs.

A group of executives at the German food ingredients conglomerate
Alfred L. Wolff GmbH (ALW) were early masters of this model, according
to allegations contained in U.S. court documents. Headquartered in
Hamburg, ALW has subsidiaries and affiliates around the world,
including in China and Chicago. After the U.S. tariffs were levied,
ALW, the largest honey importer in the U.S., began networking with
Chinese honey producers and brokers desperate to unload cheap
products.

In exchange for contracts with ALW, honey brokers agreed to move
Chinese-origin honey to Russia, India, Indonesia, Malaysia, Mongolia,
the Philippines, South Korea, Taiwan and Thailand, according to court
documents.

The brokers also agreed to repackage the honey and muddy its trail by
using a series of shell companies to ship it to the U.S. That meant
falsifying country of origin certificates and, in some cases,
deliberately mislabeling honey as molasses, fructose or glucose syrup
so customs officials would not notice a suspect increase in honey
shipments. Brokers were told to hire specific labs that specialized in
filtering the honey to remove markers (such as pollen or soil) that
could be used to trace shipments back to their true origin, according
to court documents that outline the U.S. government’s case.

One e-mail from an ALW executive to his “favourite honey scientist”
shows the executive suggesting Russia as his preferred “botanical
origin” for listing on falsified documents.

“Okay: Russia possible, I can accept,” the scientist replied. “Will
send out the changed/altered certificate today. So long as none of the
characteristic pollens other than canola appear, then nobody in fact
can say from where the honey comes.”

A bonus to those in the laundering scheme, U.S. food inspectors had a
more lax approach to inspecting shipments that did not appear to have
a Chinese connection. Tests conducted by food inspectors are based on
country-of-origin information; if Chinese roots aren’t declared on
shipments, inspectors will not test for the chemicals associated with
honey production in China, meaning contaminated loads are less likely
to be detected or seized and can still be sold for consumption. The
same is true of honey diluted with cheaper sweeteners, which is often
passed off to consumers as the real thing.

Chicago sting

That was true without many exceptions until U.S. investigators got the
right people talking. In May, 2008, federal agents arrested a pair of
young ALW executives, Stefanie Giesselbach and Magnus von Buddenbrock,
outside Chicago’s O’Hare International Airport.

Threatened with having to take the lion’s share of the blame for ALW’s
scheme, both began co-operating with investigators.

Momentum quickly picked up: U.S. customs officials seized close to
2,500 drums of suspect honey that year in Minnesota, Illinois and
Washington state and highlighted 600 loads of disguised Chinese honey
connected to ALW. Declared as Chinese, it would have been subject to
nearly $80-million in tariffs.

Investigators also uncovered a slew of ALW e-mails that allegedly
document executives knowingly unloading contaminated honey into the
food chain. They also appear to be coaching colleagues on cover-up
tactics. One instructs employees to discuss seized honey “Please OVER
THE TELEPHONE and in German!”; another suggests use of personal rather
than corporate e-mail accounts to discuss sensitive shipments.

Other files obtained by U.S. investigators document how shipments of
Chinese honey that one buyer had rejected for its chloramphenicol
content could be sold to a Texas company ALW execs referred to as the
“garbage can” for adulterated honey.

In Canada, Chinese honey is not subject to special taxes. Still,
customs and border officials conducted their own “pro-active risk
analysis” regarding honey laundering that did not turn up any evidence
of a problem, a federal spokeswoman said in an e-mail.

However, with the help of Ms. Giesselbach and Mr. Buddenbrock, U.S.
District Attorney Patrick J. Fitzgerald put together a 44-count
indictment that names six ALW subsidiaries and 11 executives for their
role in an $80-million fraud scheme, including Alexander Wolff, the
former chief executive of ALW during the time of the alleged crimes.

While many of the executives are still at large, U.S. investigators
arrested four honey brokers in the U.S. who are Chinese or Taiwanese
nationals with connections to ALW. All have plead guilty; three have
been sentenced to a range of jail terms and deportation proceedings
are continuing. The fourth is scheduled for sentencing in Seattle this
week.

A reputation soured?

Despite the arrests, the honey industry has been watching suspect
import numbers climb.

They are particularly incensed by three countries that, ten years ago,
imported zero honey to the U.S., according to Department of Commerce
data. India, Malaysia and Indonesia are mysteriously on pace to ship
43 million kilograms of honey into the U.S. by year’s end.

“It is widely known those countries have no productive capacity to
justify those quantities,” said Mr. Phipps, the honey markets expert.

He said a recent EU decision to ban honey from India over worries of
lead and other contaminates – much of it widely suspected to be of
Chinese origin – has only increased odds that more Chinese honey is
bound for U.S. borders.

Mr. Adee, the beekeeper, said he’s been attending talks in Washington
to convey who the targets of honey laundering probes should really be.

“It’s kind of like they’re running a car-stealing ring,” he said. “You
catch the guy stealing the car and put him out of business. But the
guy that’s laundering, the chop shop or the packer, he just finds
another supplier,” he said, adding: “I think it’s going to keep
getting worse until we catch a couple of big ones, give them a little
jail time.”

In the meantime, the industry is working to shore up honey’s
reputation, which is at risk of going sour if consumers perceive the
commodity as prone to adulteration. An online hub called the True
Source Honey Initiative has been set up by an industry group to
increase the brand value of “ethically sourced” honey. They have a
Facebook page where they trumpet breaks in honey laundering cases and
are planning to launch a new traceability initiative in the coming
months that will eventually allow honey sellers to trace honey back to
its original hive.

“The ultimate goal is to level the playing field for those that are
sourcing their honey according to regulations,” said Dutch Gold’s Ms.
Clark.

But implementation will take years, and beekeepers in the U.S., Canada
and Australia are struggling to compete with the cheaper, poorer
quality imports flooding the market.

“This issue really is a facet of the whole global food trade,” said
Ms. Pundyk, whose book The Honey Trail explores the impact of
globalization on bees. “We have become accustomed to getting whatever
we want whenever we want it, and there will always be someone out
there keen to pander to this.”