Florida citrus packers want box tax funds

06/23/2006 12:00:00 AM
Doug Ohlemeier


Frank Hunt III (from right), president of Hunt Bros. Cooperative, Lake Wales, Fla., and Richard Kinney, executive vice president of Florida Citrus Packers Inc., Lakeland, say half of the box assessment money the Florida Department of Citrus collects should be turned over to the fresh packers group for more fresh-specific promotions and variety development.

(June 23) LAKELAND, Fla. — Florida fresh citrus packers want to use money paid to the state’s citrus marketing agency to fund their own fresh-specific citrus promotions and variety development.

At the Florida Citrus Commission’s June 21 monthly meeting, Richard Kinney, executive vice president of Florida Citrus Packers Inc., asked the commissioners who govern the Florida Department of Citrus to turn half of the 20-cent a box tax on fresh oranges and specialty fruit such as tangerines over to the industry trade group.

Florida Citrus Packers is a trade group representing fresh packers.

The request came as commission board members considered increasing per-box taxes, or assessments, used to fund the agency’s marketing and merchandising programs.

Fresh oranges account for 3.9% of Florida’s 226 million normal annual orange production. Fresh grapefruit has 40% of its normal 45 million boxes shipping fresh.

Kinney said the state’s fresh packers would prefer to privately fund their own promotions. They said they don’t believe the citrus department can adequately market Florida’s fresh oranges.

Quentin Roe, vice president of marketing and sales for William G. Roe and Sons Inc., Winter Haven, told commissioners the fresh industry needs its own programs.

“Think hard about fresh fruit,” he said. “Don’t let it be a red-headed stepchild anymore.”

Frank Hunt III, president of Hunt Bros. Cooperative, Lake Wales, said the fresh segment needs the money to support the unique challenges it faces.

“The Florida Department of Citrus isn’t structured to address those issues,” he said. “Fresh tends to fall under the shadow of the processed industry.”

Kinney said the effort to separate funding may take up to two years.

Commissioners weren’t expected to vote on Kinney’s proposal until after they settle the proposed box tax rate increases.

ASSESSMENT HIKE

The commission had planned to vote on the rate hikes June 21 but postponed its consideration until its mid-July meeting, after a recommendation by leaders of Florida Citrus Mutual, the state’s largest grower trade group.

The proposal, designed to cover projected funding shortfalls from lower volumes — after recent hurricanes and citrus canker losses — would increase per-box taxes paid on fresh grapefruit, processed citrus and imported tangerines. Rates paid by fresh oranges and specialty citrus such as tangerines and tangelos would not be changed.

If approved, fresh grapefruit would see an increase from 25 cents a box to 40 cents a box.

The issue has caused some division in the citrus industry. Commission staff made presentations showing how reduced investments have stalled demand and consumption of juice.

The promotion agency is working with $10 million less in funds this season. Of the agency’s $51.5 million 2005-06 budget, 83% or $43 million is spent on processed citrus programs with 14%, or $7.3 million, going toward fresh citrus marketing efforts.



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