USA Rice sent a cease and desist letter yesterday to Pan American Grain demanding that the company stop its deceptive practices concerning the marking and sales of imported Chinese rice on the U.S. Commonwealth, an important market for U.S. medium grain.
“We understand that Pan American is packaging imported Chinese rice in violation of U.S. regulatory provisions – to wit, Pan American suggests on its packaging that the imported rice is from Puerto Rico, and Pan American is failing to mark clearly (and in a manner consistent with U.S. regulations) that the product actually originates in China. In addition, at least a portion of the imported rice is short grain rice, but Pan American deceptively has been labeling the product as medium grain rice,” wrote USA Rice President & CEO Betsy Ward.
Puerto Rico is a significant medium grain consumer, traditionally supplied from the mid-South. Imports from China surged beginning in late 2017 and have continued at the expense of shipments of U.S.-grown rice from the mainland. Puerto Rico consumed an average 217,674 cwt of rice in the 2016-2018 period.
Yesterday’s action is a follow-up to USA Rice’s meeting with U.S. Customs and Boarder Protection (CBP) agents in San Juan in January to educate them about our concerns over false country of origin labeling on rice sold by Pan American Grain, and USA Rice continues to engage with CBP.
USA Rice separately provided evidence this month to the U.S. Food and Drug Administration of false and misleading labeling on the Arroz Rico brand sold by Pan American Grain for medium grain when the content is in fact short grain, in addition to the rice being sourced from China but marketed with a faulty country of origin claim. We are asking for regulatory action from both agencies.
Earlier this month Puerto Rican media reported that the island’s Department of Consumer Affairs fined Pan American Grain $10,000 for deceiving consumers by claiming place of origin on 20-pound bags of medium grain rice sold under various brands was the United States when the origin actually was China.
“The U.S. rice industry can’t afford to lose any market in today’s competitive environment,” said Keith Gray, chair of the USA Rice Millers’ Association and a Texas miller. “We’re seeing the first benefits of concerted industry action to preserve the critical market in Puerto Rico. However, the Chinese rice at landed prices in Puerto Rico is well below internationally traded prices so we still have more work ahead of us.”