Stung By Fraudsters, Honey Execs Hold Secret Talks

(April 26) -- For the nation's leading honey packers and sellers, smuggled and laundered foreign honey is presenting a vexingly sticky problem. Today, they gathered for a secret meeting to discuss the impact it is having on their businesses.

"The objective of the meeting will be a frank discussion of issues affecting the domestic honey industry, primarily transshipment of foreign honey and adulteration of honey," said a note to all participants from the National Honey Packers & Dealers Association.

The meeting comes as federal investigators and the offices of the U.S. attorney in at least four states continue to hone in on packing companies, honey brokers and importers allegedly involved in facilitating or purchasing intentionally mislabeled or bogus honey.

The crime, which some major suppliers say may involve 50 percent or more of all imported honey, is carried out by foreign hucksters and shady importers who take cheap but abundant Chinese honey, move it to a country with a reputation for a quality product, change the country of origin on the shipping papers, then market the bogus load to brokers in the U.S.

Two factors are driving this illegal global bait-and-switch.

First, the U.S. has set a tariff on each pound of Chinese honey brought into the country -- higher than those levied on the honey from any other nation -- to protect domestic producers from the cheaper Chinese honey flooding the market.

Second, and more important, Chinese honey often contains traces of an illegal animal antibiotic called chloramphenicol. This drug, purchased from India, was first used years ago to stem an epidemic of disease that was laying waste to most of China's bee colonies. While chloramphenicol is not harmful to most who consume the small amount in contaminated honey, some people can become seriously ill from any amount of the drug, and the Food and Drug Administration has banned it from all food products.

The drug still taints most of the Chinese honey, some importers say.

In January, the FDA, which is responsible for keeping adulterated and possibly hazardous food off grocery shelves, notified its field investigators at U.S. ports and border crossings to seize honey from two Chinese companies after chloramphenicol, or CAP, was again found in honey samples analyzed for the agency's regional office in Denver. The alert said that the banned drug was also found in Chinese honey shipped to the United Kingdom, the European Union and Japan.

"Preliminary test results from Canada indicate about 80 percent of the samples they have analyzed are positive for CAP," the FDA warned.

The invitation-only meeting is being held in a hotel outside Chicago and the 26 participants are being asked to sign both a confidentiality agreement and an antitrust statement. Because of antitrust concerns, "there will be no discussion of prices or price levels, profit margins, mark-ups or specific branded promotional programs," the participants were told.

The attendees include representatives of the American Honey Producers Association, the National and the Western States Honey Packers and Dealers associations, the American Beekeeping Federation, the National Honey Board and the top executives of the nation's largest packer, the Sioux Honey Association.

There were no FDA or U.S. Department of Agriculture representatives listed as attending, even though the National Honey Board, a federal research and promotion activity, is operated under USDA oversight. Last week, the organizers of the meeting said they would allow two agents from U.S. Immigration and Customs Enforcement to attend, but only for lunch, during which they were to give a brief presentation. The Chicago-based agents have been involved in some of the most successful investigations of honey laundering.

Stopping this crime is difficult. It's like whack-a-mole, federal investigators say: Arrest and indict one broker and company and another, with a new name, pops up to replace it.

Because the cost of laundered honey is usually far lower than the going rate for the good stuff, investigators told AOL News, it's difficult to believe that honey buyers don't know that they're purchasing it.

Meanwhile, conscientious U.S. and Canadian packers who pay top prices assuming that will ensure quality find themselves instead buying honey diluted with sugar water or corn syrup or tainted with pesticides or the antibiotics. Add the continuing worldwide problem of colony collapse, and a lot of the sweetness has been taken out of the honey business.