After the hard freeze of 1999, Sunkist Growers Inc. figured to bounce back by 2001. However, today the Sherman Oaks-based citrus fruit co-op is still watching its revenue drop and its market share erode as it accuses the European Union of dumping Spanish Clementine oranges onto the U.S. market at prices lower than domestic growers can sell them for. Sunkist, which markets 65 percent of all citrus fruit sold in the U.S., claims the European Union has given the Spanish citrus industry about $15 billion in total subsidies in the past four years in an effort to gain a foothold in the U.S. market. It blames much of its 2000 revenue decline on the imported oranges. Sunkist, which last year lost $4.1 million on $846.7 million in revenue, has taken the offensive and asked U.S. trade officials to pressure the European Union to halt what it calls unfair subsidies to Spain. According to Kam Quarles, director of Sunkist’s Washington D. C. office, a 140-percent increase in imports of Spanish Clementine oranges has coincided with losses of between $12 million and $15 million for Sunkist over the past four years. “We’ve had only limited success in our efforts to identify and quantify all these subsidies,” Quarles said. The EU, however, has admitted that it built a Spanish packing plant, featuring state-of-the-art computers and packing equipment aimed at speeding up packing and shipping of citrus to the U.S. and elsewhere. But more importantly, the cost of packing and shipping Spanish citrus to the U.S. even with low-paid Spanish labor would be prohibitive without other government subsidies such as fixed fees to growers for produce, Wootton claims. The dilemma comes at a time when the Valley-based co-op is trying to put its financial house back in order after severe crop damage in the winter of 1998-99 caused about $1 billion in crop losses. While the latest trade scrap is not exactly the “War of the Oranges,” it is close, said Michael J. Wootton, Sunkist vice president of corporate relations. “There has to be a reciprocity in these trade relationships. Otherwise, we’re disadvantaged and we can only stand to be disadvantaged for so long before we become noncompetitive,” Wootton said, noting that the company does 70 percent of its business in the U.S., the remainder overseas. Two weeks ago, Sunkist asked the U.S. International Trade Commission to investigate European Union trade policies to determine whether unfair government trade subsidies have allowed Spanish Clementine oranges to flood the U.S. market. Several treaties between the U.S. and the European Union put limits on trade subsidies. Scott Mabs, director of grower services for California Citrus Mutual, a non-profit grower trade group in Exeter, Calif. which also represents growers with Sunkist, said Sunkist has a good case that could result in sanctions against the EU. “We’ve looked at the situation and it does appear that Clementines are being dumped,” he said. “It used to be that you could rebound from a freeze rather quickly. Now, with all this competition, it’s a lot harder to get the buyers back and get that supermarket shelf space back.” Sanctions or tariffs possible If the commission finds the EU violated trade agreements with the U.S. with illegal subsidies, it could impose up to 100-percent tariffs on orange and lemon shipments, or other sanctions. About 10 years ago, the commission imposed a 100-percent tariff on European citrus, but backed off when the Europeans threatened to ban U.S. wheat from Europe. Quarles told commissioners government subsidies to Spanish orange growers have severely impacted Sunkist’s navel orange operations. However, it’s unclear how much revenue the import of Spanish oranges has generated for European growers. Wootton said the U.S. has few restrictions on foreign citrus imports, giving low-cost foreign producers a leg up on Sunkist and smaller domestic citrus producers. “It’s just a question that, if we’re going to be an open market, then we need to make sure that other markets are available to us,” he said.