STIFF TARIFFS EXPECTED ON IMPORTS OF PASTA

RICHARD TURCSIK

WASHINGTON -- The U.S. International Trade Commission and the Commerce Department here are expected to impose stiff tariffs on pasta imported from Italy and Turkey this week in an effort to stop alleged dumping of less-expensive, imported pasta.

The ITC took action in response to countervailing duty and dumping cases filed by Borden, Columbus, Ohio; Gooch Foods, Lincoln, Neb., and Hershey Foods Corp., Hershey, Pa. Domestic manufacturers claim the European Community unfairly subsidizes pasta being imported into the United States. The tariffs, the rate of which were not available at press time, will be in place for at least a year while the government further investigates the dumping claims.

Total imports of pasta into the United States were up 30% last year to 500 million pounds, and have increased nearly 200% over the last decade. Non-egg pasta imports from Italy totaled 294 million pounds in 1994, up 36% from 1993, while imports from Turkey were 67 million pounds, up 39% from 1993.

"We just want a level playing field," said Jula Kinnaird, president of the National Pasta Association, an Arlington, Va.-based trade association representing 23 domestic pasta manufacturers that produce 85% to 90% of domestic products.

"The case was filed because import volume has been so high and the pricing pressure is so intense that our domestic pasta industry is really suffering injury. Imports from Italy and Turkey are being sold in this country often for less than the actual cost of manufacturing for a U.S. pasta manufacturer. It has become almost impossible for U.S. pasta manufacturers to compete," Kinnaird said.

Italy and Turkey account for 70% of the pasta imported into the United States, Kinnaird said.

Market share varies by region, but is strongest on the coasts, and can range up to 25% in some markets.

Claudia Vitelli, president of Vitelli-Eleva Co., Hawthorne, N.J., which imports Luigi Vitelli pasta from Turkey and distributes it along the East Coast, said the tariffs will devastate her firm.

"When the duty is imposed, our price will go up overnight and we will not be able to sell it at the price we are selling it," she said. Vitelli regularly retails from 49 to 59 cents, and it is often featured at three for $1.

She said her retailers are distraught about the looming higher prices.

"Everybody is aware of the situation, and everybody is upset because we have created a new niche at the low end of the market. This would be very severe damage for us because we would lose our price position," Vitelli said.

"We are very scared, but we are going to prove that at least Turkey doesn't receive any subsidy. We have our lawyer in our factory in Turkey and he is gathering information to prove to the Department of Commerce that dumping really doesn't apply to us," she said, explaining her firm can charge less because it uses a different strain of durum wheat and has less labor expense.