www.admworld.com | By Brian Peterson | October 14, 2003
Archer Daniels Midland Company (ADM) announced today that it has filed notice of its intent to submit a claim under Chapter Eleven of the North American Free Trade Agreement challenging the Government of Mexicos imposition of a 20 percent tax on soft drinks containing high fructose corn syrup. This notice initiates an arbitration proceeding under NAFTA through which ADM will seek to recover the damages it has incurred as a result of the soft drink tax, which is designed to promote the use of Mexican sugar in soft drinks rather than HFCS. Soft drinks containing sugar as a sweetener, rather than HFCS, are not subject to the tax.
Since the Mexican Congress first imposed the tax on January 1, 2002, ADMs HFCS joint venture plant in Guadalajara, Mexico has been forced to stop production of HFCS-55 for soft drink use, and ADM has also been compelled to stop exporting HFCS-55 from its U.S. plants for resale to Mexican soft drink bottlers. Mexico is the worlds second largest consumer of soft drinks, and the market for HFCS in that country was growing rapidly until the Mexican Congress imposed the discriminatory tax. Under the procedural requirements of Chapter Eleven, ADM can file its claim six months after the notice of intent to submit a claim that it is filing today. The claim seeks damages in excess of $100 million.
Archer Daniels Midland Company (ADM) is a world leader in agricultural processing. The Company is one of the world's largest processors of soybeans, corn, wheat and cocoa. ADM is also a leader in soy meal and oil, ethanol, corn sweeteners and flour. In addition, ADM is building a position in such value-added products as specialty food ingredients, bioproducts and nutraceuticals (such as Vitamin E and sterols). Headquartered in Decatur, Illinois, ADM has over 26,000 employees, more than 270 processing plants and net sales for the fiscal year ended June 30, 2003 of $30.7 billion.
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