Why Thailand and not Indonesia?
A closer look at the motives behind Maui Pineapple Co., Ltd's antidumping charges.
Published on February 2, 2001

At year-end 1997, Thailand's exports of canned pineapple to the U.S amounted to only 48.3 million baht, down 39% from 1994. The lack of demand in the US market was due mainly to the high antidumping duties, which the US placed on imports of canned pineapple from Thailand in June 1995. Apart from the antidumping duties on exports to the US, Thailand also experienced poor pineapple harvest during 1997. Furthermore, Thailand was suffering through the height of a serious economic crisis. These three factors, while having significant adverse effects on Thai producers, had very favorable effects for U.S. based Maui Pineapple Co., Ltd (Maui).

In 1996, Maui's canned pineapple division reported its first operating profit since 1990, at 4 million dollars, compared to an operating loss of $900,000 in 1995. In 1997, the company recorded a second year of operating profit at 3.75 million dollars. The growing market for Maui's pineapples allowed them needed capital for long awaited investments. Maui knew that, due to the weakened Thai competition, any investments they could make during these years would greatly increase their market share.

In a report to the Thai Ministry of Commerce, Willkie Farr and Gallagher, the lawyers representing Thailand's canned pineapple industry against the U.S. antidumping charges, alleged that the motivation behind Maui's antidumping claim was suspicious from the day it was filed. Why didn't Maui include Indonesia in its antidumping petition, despite Indonesia's large and rapidly expanding pineapple exports?

After careful look at letters to shareholders distributed by Maui Land and Pineapple Co. (the parent company of Maui) published in its annual report for 1997, the Thai pineapple producers realized Maui had formed a "strategic alliance" with P.T. Great Giant Pineapple Co., the largest and lowest-cost grower and canner of pineapple in the world. Maui entered into a joint venture (JV) with Great Giant through a wholly owned subsidiary, Royal Coast Tropical Fruit Co. The JV, named Premium Tropicals, International LLC, marketed and sold Indonesian canned pineapple to the U.S. However, an actual merger between the two companies, Maui and P.T. Great Giant Pineapple Co., did not occur until 1998.

Shortly after the merger, the lawyers defending canned pineapple exporters from Thailand affirmed, "What is clear is that Maui does not sell into the same market tier as the Thai packers - but its Indonesian partner Great Giant does," according to a Bangkok Post article printed August 12, 1998.

A successful merger and low competition was reason for celebration as Maui recorded their best financial results in ten years at the end of 1998. In 1999, Maui's operations were not as successful, but they still completed the year with an operating profit of 6.1 million dollars. These numbers tend to confirm the suspicions of Thai canned pineapple exporters believe the real motive behind the Maui antidumping complaint against the Thai pineapple industry was to open the U.S. market to low-cost imports from Maui's Indonesian partner.

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