Rice Market: Puerto Rico Supplier Fined for False Advertising

Last week, the Department of Consumer Affairs of Puerto Rico (DACO) issued a $10,000 fine against Pan American Grain for violating the Deceptive Practices and Ads Regulation in the rice packaging they sell in Puerto Rico. The company was guilty of deceiving consumers by claiming place of origin on 20-pound bags of medium grain rice sold under the Valencia, D’aquí, and Rico brands was the United States when the origin actually was China.

“This is a victory and good first step for exporters of U.S. rice from the mid-South who have seen a steady decline in sales at the hands of imports from China,” said Keith Gray, chair of the USA Rice Millers’ Association and a Texas miller.

The action by DACO follows a meeting between USA Rice staff and legal counsel and the San Juan office U.S. Customs and Boarder Protection (CPB) in January to outline our concerns about country of origin mislabeling by Pan American Grain and the extremely low prices at which the rice from China was entering the United States. Customs regulations prohibit the type of country of origin labeling used by Pan American Grain, and USA Rice urged CPB to launch an investigation.

Puerto Rico is a substantial medium grain market, with annual consumption of 217,674 cwt in the most recent three years. Independent marketing reports show a decline in rice marketed on the island originating in the United States while retailers sourcing from China have gained market share steadily.

“We have concerns not only about the country of origin marking on this rice but also about whether the rice is medium grain as labeled on the package,” said USA Rice COO Bob Cummings who met with CBP officials earlier this year. “We are taking these labeling issues to the U.S. Food and Drug Administration for their action.”


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