The Honeygate scandal is over; or at least the latest incarnation of honey laundering has come to a close. Two major U.S. honey packers, Groeb Farms in Michigan and Honey Solutions in Texas, confessed to importing million of dollars in mislabeled honey. Groeb Farms will pay a $2 million penalty; Honey Solutions will pay a $1 million penalty. Both companies agreed to adhere to honey import compliance programs, and Groeb fired several senior executives.
Despite legal closure, Honeygate, in other forms, is still bubbling under the surface. In reality, with billions of dollars up for grabs on the counterfeit food market, Honeygate is going nowhere.
5 takeaways
1. Get caught honey laundering? Pay a fine, act contrite, issue a mea culpa, promise to make changes, follow a compliance program, and then let the band play on. Other companies involved in illegal honey imports watched the entire legal affair and took good notes: Multiple millions in profit against a million-dollar penalty can pencil out to very profitable math. (A pending civil suit against Groeb Farms and Honey Solutions may pack more financial sting than Department of Justice penalties. See #5 below.)
2. China knocking. The Chinese are not about to quit knocking on the import door. American consumers demand 400 million pounds of honey per year; but U.S. domestic production is capable of only producing 150 million pounds per year. The 250-million pound void is an El Dorado opportunity for foreign companies; particularly from China, the world’s No. 1 honey producer at 300,000 tons per year.
