CANADA IMPOSES 60% DUTY ON GERBER BABY FOOD LINES

BRIAN DUNN

MONTREAL (FNS) -- Canadian trade officials here have imposed a 60% duty on imported Gerber baby food, according to published reports.

The duty was slapped on Gerber (Canada) Inc., Mississauga, Ontario, after H.J. Heinz Co., Toronto, complained Gerber was dumping.

If Gerber can't overturn the ruling, it may stop selling in Canada. In a press statement, Gerber said it has not engaged in any anti-competitive practices.

"Gerber has for nearly 50 years maintained a fair and competitive pricing structure to give consumers a choice in their baby food purchases," the release stated. "In fact, on average, Gerber's prices are consistent with Heinz."

Heinz, which has an 80% share of Canada's $60 million jarred baby-food market, complained last year that Gerber was selling its baby food below market value. Heinz accused Gerber of dumping after retailers started selling Gerber products for as low as 33 cents a jar. Heinz baby food sells for between 43 and 49 cents a jar.

Gerber's pricing forced Heinz to cut back production by 1 million cases a year and lay off 50 workers at its Leamington, Ontario, plant, according to reports.

If Gerber, which has a 20% share of the Canadian baby-food market, offsets the duty with price increases, it would likely lose customers.

Gerber has imported baby food from its Fremont, Michigan-based facility since 1992, after it closed its Niagara Falls, Ontario, plant.

The Canadian International Trade Tribunal, which charged the company with dumping and imposed the duty, will hold hearings to determine whether the duty is necessary or harmful to consumers.

The hearings are scheduled to end July 2.

Gerber (Canada) Inc. is a subsidiary of Gerber Products Co.

Officials from Heinz could not be reached for comment.