ITA Ensures Smooth Supply of Papa John’s Products to El Salvador
The Department of Commerce’s International Trade Administration (ITA) helped Louisville based Papa John’s International Inc. overcome a cheese quota allocation issue in El Salvador. This could have significantly limited the company’s ability to adequately supply U.S. mozzarella to its current and future restaurants in El Salvador.
Why it matters
If the United States and Papa John’s had not worked to address the cheese quota allocation issue with the Government of El Salvador, Papa John’s risked receiving less-than-favorable treatment in importing cheese from the United States, ultimately harming its operations in country.
Courtesy: Papa John’s
The Government of El Salvador’s initial decision to divide the cheese quota negotiated under the CAFTA-DR into six types of cheeses was not in accordance with actual in-country demand. A second U.S. cheese quota distribution by the Government of El Salvador did distribute the unused quota amount in accordance with demand, but this was too little too late for Papa John’s. Importing cheese outside of the quota increased costs by 40 percent. The delay in demand-driven mozzarella quota distribution prevented Papa John’s from importing more cheese from the United States. Moreover, had the Government of El Salvador continued to reach its cheese quota allocation decisions without regard to actual market demand, Papa John’s plans to open several additional restaurants in El Salvador would have been jeopardized.
The ITA team, with the support of the U.S. Department of Agriculture (USDA) and the Office of the U.S. Trade Representative (USTR), worked with the Government of El Salvador to ensure that its quota allocation for cheese reflected market demand and remained consistent with CAFTA-DR obligation. In March 2012, Papa John’s reported that it was pleased with its 2012 cheese allocation as mozzarella was given over 70 percent of the initially assigned cheese quota. The Government of El Salvador is now taking into account market demand for the product. Because of ITA’s successful intervention, Papa John’s was able to open several new restaurants in El Salvador.