Court Upholds Renewed Competition for Jarred Baby Food

OTTAWA, June 2, 2004 -- The Federal Court of Appeal has upheld a Canadian International Trade Tribunal (CITT) ruling that removed the imposition of a duty on U.S. jarred baby food imports, providing Canadian consumers and retailers with more product choice.

The Federal Court of Appeal dismissed an application by Heinz Canada for judicial review of an April 2003 CITT ruling that Heinz Canada, as the sole domestic producer of jarred baby food under its Heinz and Pablum brands, is unlikely to suffer material injury due to renewed dumping. The court also ordered costs in favour of the Commissioner of Competition, Gerber Products Company and Novartis Consumer Health Canada Inc.

In April 1998, the CITT ruled that dumping by U.S. producers had led to material injury to Heinz Canada, following which it placed a duty on U.S. imports.

The Competition Bureau intervened in the 1998 CITT hearing, arguing against any duties being placed on U.S. imports. It also intervened in the 2003 CITT expiry review and the recent Federal Court of Appeal's judicial review hearing.

In 2003, the Bureau submitted that evidence did not indicate a direct link between dumping and material injury. Any economic harm to Heinz Canada would result from the following: renewed competition in an increasingly segmented baby food market; self-imposed injury resulting from corporate agreements preventing Heinz Canada from competing in the U.S.; and the lack of product innovation on the part of Heinz Canada.

The Bureau also noted that Canadian regulations governing jar sizes and food ingredients would prevent American firms from effectively competing in Canada for at least two years. Any injury that Heinz Canada was likely to suffer would be due, for the most part, to the effect of the entry of renewed competition into the market, not to dumping.

The Competition Bureau appears before federal and provincial regulatory Commissions and Tribunals to bring forth evidence and argument to assist the regulatory authority to consider the consequences of its decisions on competition and consumers.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

Certain Prepared Baby Foods Originating in or Exported from the United States of America (Canadian International Trade Tribunal - Expiry Review No. Rr-2002-002)

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