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How Brazil stole the production of orange juice from Florida

Source: CNBC – Peter Q.W. Chung

In the United States, orange juice is synonymous with Florida. It may come as a surprise, then, to look at the fine print on a bottle of Tropicana and Simply Orange and discover that part of the product isn’t from the Sunshine State after all. It’s from Brazil.

Orange juice is big business in Brazil. After a series of frosts swept through Florida in the 1960s, devastating orange groves, Brazil met that deficit with its own supply, starting with frozen concentrate orange juice. Then, in 2005, citrus greening disease, which had spread throughout the world from China, arrived in Miami. It rendered oranges in affected groves inedible, resulting in a 55 percent decline in production over the next decade. In response, Florida’s orange growers raised OJ prices by nearly $2 per gallon, causing bottlers to turn to cheaper Brazilian OJ.

Today, more than 50 percent of all orange juice bottled by major companies like Tropicana is supplied by a Brazilian company, shipped in specialized fruit juice tankers from the Port of Santos in Sao Paulo. In 2017, this OJ export market was worth $1.4 billion. Brazilian orange juice companies used this cash influx to come into the U.S. and buy out Florida’s production facilities, making Brazil a financial backer of much of America’s orange juice.

However, cheaper Brazilian orange juice has some serious costs. One 2015 report from activist organization Supply Cha!nge called the orange picking industry in Brazil “a modern system of slavery.” Workers are sometimes unpaid for weeks and trapped in employment contracts that keep them in debt and stuck on the plantation, the report says.

The report also alleges that high pesticide use leads to unsafe working conditions and even death. Supply Cha!nge claims the orange juice produced under these conditions ends up in Simply Orange, Tropicana and Minute Maid bottles.

CNBC reached out to several top exporters of Brazilian OJ — Citrosuco, Cutrale and Louis Dreyfus Co. — and two major retailers of OJ in the U.S. — Coca-Cola and PepsiCo — for comments on the report’s claims.

Citrosuco told CNBC “it does not recognize any working condition analogous to slavery in its relations and emphasizes that it does not agree with such practices. The company ensures that it strictly complies with the labor legislation regarding all its employees.”

Cutrale said in a statement to CNBC that it “strives to be totally compliant with the labor and environmental laws everywhere it operates. All of our more than 18,000 workers earn salaries above minimum wage by law, have weekly rest days, receive robust training and are provided with appropriate safety equipment.”

Louis Dreyfus Co. did not respond to CNBC’s request for comment.

Coca-Cola, which owns Simply Orange and Minute Maid, has not responded to CNBC’s request for comment. But the company was quoted in the Supply Cha!nge report as saying that it does “not tolerate the practices documented in this study. Although Coca-Cola regularly audits and controls the juice companies and the plantations they own directly, this does not include subcontractors.”

Pepsico, which owns Tropicana, did not respond to CNBC’s request for comment.

Recently, President Donald Trump’s tariffs and trade war have provoked the EU, Canada and China to impose an import tax on U.S. orange juice. While American exports of OJ have fallen 60 percent in the last five years, tariffs from some of its largest trading partners could kill America’s export industry, increase reliance on Brazil and raise OJ prices for Americans.