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Canadian ginseng growers take aim at Asian counterfeits

Canada is the world’s largest producer of North American ginseng – the medicinal herb root that’s ubiquitous in global Chinese health-food circles – but while exports have made up the bulk of the business, growers want to reclaim one of the largest A
Genuine Canadian-grown ginseng products sold at Great Mountain Ginseng in Richmond. Photo: Rob Kruyt

Canada is the world’s largest producer of North American ginseng – the medicinal herb root that’s ubiquitous in global Chinese health-food circles – but while exports have made up the bulk of the business, growers want to reclaim one of the largest Asian markets of all: Vancouver.

Officials in the ginseng industry, however, note that competition for domestic retail dollars in Metro Vancouver’s ginseng market has been cutthroat.

And among the biggest culprits for driving prices lower has been Asian ginseng – often grown in China – being imported to local stores and masquerading as Canadian roots.

“We took a trip to Vancouver last year because we’ve hearing from some of our partners that the counterfeiting of Canadian ginseng is just unbelievable,” said Remi Van De Slyke, chairman of the Ontario Ginseng Growers Association (OGGA). “So we did a fact-finding mission; we went to Aberdeen Centre and to Chinatown, and it was unbelievable how much Chinese ginseng was packaged as product of Canada.”

What’s worse, he said, is that this is happening at a time when Asia’s desire for Canadian ginseng is at an all-time high. Van De Slyke said that the Canadian roots exported to places like Hong Kong and Taipei have been increasingly visible in their branding, compared with eight years ago when few stores knew of the existence of Canadian ginseng despite having carried the product for decades.

“There’s a lot of theory on why we fell behind for a while,” he said. “I think that, in the beginning, a lot was exported through the United States, and with the product being called North American ginseng, people just associated it with America. We are trying to change that – and we are seeing a change.”

That’s why, Van De Slyke said, the OGGA is launching new efforts to re-establish market links for Canadian ginseng in Vancouver and Toronto, where large numbers of Chinese immigrants have settled over the decades. In addition, with 300,000-plus Chinese tourists visiting Vancouver in 2017 (up seven per cent from the prior year), many visitors are now coming with the hope of buying Canadian ginseng as gifts for friends and relatives back home. When those customers end up buying Chinese-grown ginseng in Vancouver, it’s a cause for concern, Van De Slyke said.

“It’s a very serious problem, and we are talking to the government about it to try to put a stop to it,” he noted. “Because when a Chinese tourist comes to Canada and tries to buy Canadian ginseng and they are getting stuff they don’t want, that hurts us in the long run. That customer could be buying Canadian-grown ginseng, and he would then tell his or her friends about how good our ginseng is. That type of marketing buzz is crucial for us, and we are not getting those chances.”

Canada produces about seven million pounds of ginseng a year, with most of the growers located in southwestern Ontario – although a few growers operate in the B.C. Interior near Kamloops. Only about 300,000 to 400,000 pounds are sold at Canadian retail stores.

Carrie Pan, who runs Kamloops-based Majestic Ginseng Products Ltd., said more than 80 per cent of the ginseng products sold at retail stores in the Lower Mainland are from Asia, although most are legally labelled and imported. Pan said Asian ginseng is cheaper than Canadian products because of lower labour costs, and because of factors such as Canadian ginseng’s classification as an endangered species, which complicates the selling process for retailers.

Vancouver is dominated by Asian ginseng because the consumer base is highly price-conscious, and Pan said she intentionally keeps her retail sales in Kamloops to maintain distance from the chaotic marketplace in the Lower Mainland.

“For customers who visit us, we have a 45-minute tour that explains to them why Canadian-grown ginseng is better,” she said.

“Canadian-grown ginseng will taste much better than Asian ginseng; that’s guaranteed. And that’s what we try to educate buyers about when they come here; so we always make sure they taste the product before they buy. If a store won’t let you taste, then you have to be careful.”

Another reason for the lack of regulation in Vancouver, Pan said, is the lack of presence for local growers. That’s because many B.C. ginseng farmers are aging out of the business, while newer farmers are unwilling to commit to a crop that takes six years to harvest.

“Who wants to spend the start
up capital?” Pan said. “That’s a long time to wait for making a living.”

North American ginseng, unlike its Asian counterparts, is known for its cooling medicinal properties, officials say. It’s said to fortify the immune system, regulate blood pressure and boost energy. The crop was among the first commodities traded between Canada and China, when in 1760 a batch of wild ginseng made its way between the two markets.

And while the number of growers in B.C. is dwindling, the opposite is true in Ontario, where the OGGA has 170 growers on record. Many officials note that the rapid growth of China’s middle class in the last decade has fuelled demand for the medical root, causing the export portion of the business to skyrocket.

But increasing concerns about the rising Canadian dollar, as well as the overall health of global trade in light of the U.S.-China conflict, have cast some clouds over the industry, said Great Mountain Ginseng co-owner Schelling Yeh, whose company has 11 stores across Canada, including one in Richmond’s Aberdeen Centre, in addition to farming operations.

For example, China has imposed a 15 per cent import fee on U.S.-grown ginseng this year, in retaliation for the Donald Trump administration’s tariffs on Chinese exports to the United States. While that’s only affecting the sale of U.S. ginseng right now, Yeh said there’s uneasiness among growers who are dependent on sales in the Chinese market.

That’s why domestic sales are now an increasingly key part of Canada’s ginseng business, Yeh said, adding that Vancouver customers need to be informed about the products they are getting in the local marketplace.

“I hear anecdotally from my customers that these [counterfeit ginsengs sales] are happening, but can I confirm it statistically? No. So I don’t want to talk about other people’s products.

“I try to focus on the quality of our products…. That’s why we focus on educating our customers, to prove that we only add value in Canada. I look at it this way: Why would you buy a Chinese product in another country if you can buy it in China? If you come here to Canada to buy Canadian, you want to make sure you are buying an authentic Canadian product. You want to buy what you paid for, and that’s what we try to reinforce to the customer.”

One of the central problems, OGGA’s Van De Slyke said, remains the lack of public recognition in this country for Canadian ginseng.

“A lot of people don’t realize the ginseng industry here in Canada is pretty big,” he said. “Just going to our government officials, a lot of them are shocked there’s an industry here. I think we’ve changed their minds, but it takes time to get that point across.… It’s just the nature of the business. We don’t make a big roar on the agricultural scene. We just keep to ourselves and grow our crops. But when issues like this arise, we have to speak up – and we are now.”