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Pain in Maine stick business.

Next time you eat an ice cream bar, consider the ice cream stick. Chances are it came from the ice cream stick capital of the United States--an area made up of four small towns near Bangor, ME.

That's where the four manufacturers of ice cream sticks and other birch products are located--all within a 50-mile radius. There's Foster Mfg. in Wilton, Hardwood Products in Guilford, Diamond International in Oakland and Solon Mfg. in Solon. Together, the companies supply the nation with 5 billion ice cream sticks a year. Until recently, it was virtually certain that your ice cream slick was U.S. made. In fact, seven years ago the chances were 1 in 10 that the stick was made in America. Now, the odds are one in three.

Foreign competition has entered the U.S. mainly from South America and the Philippines. The foreign manufacturers are able to underprice the U.S. companies thanks to their low wage rates. In the Philippines, for instance, workers are paid 19 cents an hour while the new minimum wage law sets a floor of $2.65 an hour for American workers.

The U.S. companies have asked the Carter Administration not to remove the 8% tariff on imported ice cream sticks, as requested by Honduras, Brazil and Chile.

Foreign competition is noticeably affecting the U.S. industry. Twelve years ago there were 10 U.S. ice cream stick manufacturers, now there are four. One U.S. manufacturer says a customer bluntly told him, "We will be buying from a foreign manufacturer because they can give us a better price."

But other factors, too, are changing the face of the ice cream stick industry. For one, white birch is getting harder to find. The companies are reaching further and further out to get birch from Maine, New Hampshire and Canada. The price is going up as well, rising from $45 per cord in 1972 to $92 a cord in 1978. The higher labor and production costs are also putting on pressure. At Solon Mfg., which produces one-third of U.S. ice cream sticks and has a capacity to make 10 million a day, owner Harold Tewksbury is examining operations in his plants closely.

Other birch products made by the four Maine companies include toothpicks, dowels, paint paddies, spoons, cotton-tipped applicators and clothespins. Foreign competition is evident in some of these products, too. For instance, Red China is making a clothes-pin selling at far below the U.S. price.
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Title Annotation:1978 Wood & Wood Products
Publication:Wood & Wood Products
Date:Mar 1, 2004
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