Government Defends Commerce's Methodology in Case Involving Honey From India

The Commerce Department's determination to use acquisition costs as a proxy for costs of production without applying adverse inferences in its antidumping duty investigation covering raw honey from India was necessary to account for the structure of the Indian honey industry, with thousands of beekeepers and middlemen, and derived from lessons learned in a previous AD proceeding involving honey, DOJ argued in a March 17 reply brief at the Court of International Trade (American Honey Producers Association v. U.S., CIT # 22-00195).

The use of acquisition cost of the two mandatory respondents to the investigation, Allied Natural Product (Allied) and Ambrosia Natural Products (Ambrosia), "ensured the capture of all costs, expenses, and profits of the beekeepers and middlemen involved in the production and collection of raw honey," DOJ said. The two largest Indian honey exporters were not raw honey producers. Instead, the producers were “thousands of unaffiliated middlemen and beekeepers," DOJ said. Commerce explained in its final determination that “due to the sheer volume of beekeepers in India, a statistically valid random sample was not possible," which necessitated a different approach for finding production costs.

Commerce correctly "weighed its responsibility to apply the antidumping law in a manner that prevents the evasion of antidumping duties with whether to continue with its precedent in obtaining the cost of production of raw honey from unaffiliated producers," DOJ said. Commerce considered several factors in deciding to use acquisition costs, including the lessons learned from the honey from Argentina investigation, DOJ said. In that proceeding, the thousands of unaffiliated beekeeper respondents often refused to respond or were unable to provide useful cost data because of their small unsophisticated nature and limited recordkeeping abilities (see 2303070046).

In addition, Commerce correctly found that adverse inferences with regard to financial statements provided by Allied and Ambrosia were unnecessary, DOJ argued. Both companies acted to the best of their ability to comply with the investigation. The audited financial statements for fiscal year 2020-2021 were submitted to Commerce at "the earliest possible opportunity" despite assertions by the plaintiffs, DOJ said. Both respondents "were responsive to all of Commerce’s requests for financial statements and supplemental information" even when they could not meet Commerce’s original timeline due to changes in the Indian Tax Authorities filing deadlines, DOJ said. "Both provided updates on a deadline that neither could control."

In their Dec. 16 motion for judgment, the American Honey Producers Association and Sioux Honey Association said Ambrosia and Allied withheld financial statements and impeded the investigation. The respondents failed to submit completed financial statements while the record was open, but Commerce accepted those statements in contradiction of its established practice, the plaintiffs argued in December (see 2208080054).