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San Diego Union Tribune: Mushroom Grower Cited by USDA over Licensing

May 02, 2008
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The U.S. Department of Agriculture has cited a San Marcos grower of specialty mushrooms for violating licensing rules and for mislabeling where its mushrooms are grown.

Golden Gourmet Mushrooms, which has been in business for 20 years, was cited for “repeated and flagrant violations” of the PACA, or Perishable Agricultural Commodities Act.

Craig R. Anderson, co-owner of Golden Gourmet Mushrooms, said the citation stemmed from the company's failure to get a PACA license in late 2006 and all of 2007, when it stopped growing mushrooms in North County for a time as a new, larger production facility was being built.

During that time, the company imported specialty mushrooms from its longtime partner, Hokuto Corp., the largest mushroom grower in Japan. But some of Golden Gourmet's marketing materials continued to say the mushrooms were grown organically in the United States.

Moreover, traders of fresh or frozen fruits and vegetables must be licensed by the Agriculture Department. So when Golden Gourmet began selling imported mushrooms that it didn't grow itself, it needed a USDA license. It didn't have one.

Anderson claims that growers don't need a PACA license, and Golden Gourmet didn't have one for several years.

“I screwed up. That's a fact,” Anderson said. “It was an error not to have the PACA license, but for all those years we were a grower and a seller. Our error was during this transition” while a new facility is being built.

A USDA spokesman said no one was available yesterday to provide more details regarding the Golden Gourmet citation.

In October, the USDA began investigating the company after the Government Accountability Project, a public-interest group, filed a complaint alleging that the Japanese-grown mushrooms were being passed off as domestic and that some conventionally grown mushrooms were being marketed as organic.

The USDA hasn't issued a citation on the organic complaint to date, and Anderson sent the Union-Tribune documents from Quality Assurance International, which certifies organic growers, that Hokuto had indeed been certified as an organic producer for several mushroom varieties.

The USDA citation forbids Anderson and co-owner Nicholas D. Connor from being employed or affiliated with any PACA-licensed company until May 1, 2009, and then only with the posting of a USDA-approved bond.

As of yesterday, The Kinoko Co. has become the exclusive distributor of the Golden Gourmet Mushrooms brand. It's also a distributor of other brands for which Hokuto is the grower.

Kinoko is run by Anderson's son, Dylan, with the full knowledge of the USDA, Anderson said. It has a PACA license.

For years, Golden Gourmet grew mushrooms at an 80,000-square-foot facility in San Marcos using techniques developed by Hokuto. It specialized in maitake, king trumpet, white beech, brown beech and enoki mushrooms.

In 2006, it entered into a deal under which Hokuto will build a 250,000-square-foot facility in San Marcos on the Golden Gourmet site. Hokuto owns the facility.

The robotic growing operation is expected to be finished later this year, and will expand capacity from 1 million pounds annually to 6 million.

Golden Gourmet continues to exist as a company, focusing on medicinal mushrooms. It grows different varieties for the nutritional supplement market and for pet and equine uses.

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