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MAHONING VALLEY Not worth their salt? Feds question prices



Published: Sun, April 7, 2002 @ 12:00 a.m.



The price increase can be traced to last year's harsh winter, companies say.

By IAN HILL

VINDICATOR STAFF WRITER

CLEVELAND -- Complaints about the price of road salt have started to pile up like so many feet of snow, according to the U.S. Department of Justice.

Recently the Justice Department sent a letter to Austintown, Boardman and Canfield township trustees stating that it has received "numerous complaints about the price and availability of road salt during this season." The cost of salt this year was as much as $14 per ton more than it was last year for some area communities.

The department believes the complaints could reflect violations of antitrust laws.

Attached to the letter is a survey that asks trustees how much they paid for salt each year since 1990. The survey also asks trustees if they experienced anything unusual during the salt bidding process, such as extraordinary price changes.

An official with the Justice Department's antitrust division in Cleveland wouldn't comment on the letter or say if the salt companies were under investigation. The department also wouldn't discuss if the letters were sent to local governments statewide.

Response: Canfield Township Road Supervisor Gary Cook wrote in his township's survey that a salesman from Chicago-based Morton Salt told him the price increase was a result of a salt shortage. Last year, Morton sold 1,471 tons of salt to Canfield for $31 per ton. For this year, Morton said it would sell salt to Canfield for $52 per ton.

Trustees did not accept Morton's bid, instead deciding to buy from International Salt Co. of Clarks Summit, Pa., for $45 per ton.

Cook questioned how a salt shortage could have such a large effect on price.

Gouging? "Seems to be gouging," he wrote in the survey. "If they don't have product, they can't sell it regardless of price, can they?"

Most local officials said they weren't sure why the cost had increased. Some, like Boardman Township Road Supervisor Gary Dawson, said they didn't think the price increase was large enough to demonstrate wrongdoing by the salt companies.

Boardman paid about $4.50 more per ton to buy salt this winter as compared to last winter. Both years the township bought salt from Cargill Salt in Minneapolis.

"Gouging? No, I wouldn't say so." Gary Dawson said. "Nobody really tried to gouge me."

Other officials, including Liberty Township Road Supervisor Tim Monroe and Austintown Township Road Supervisor Mike Bertilacci, said they didn't believe the effects of the increase because of this year's mild winter.

"It worked out because the weather cooperated as well," Monroe said, while Bertilacci added, "If you had a [harsh] winter, it'd have a tremendous effect on the budget."

Explanation: Cargill Spokeswoman Lori Johnson attributed the price increase to last year's harsh winter. She said the company almost emptied its salt stockpiles to meet the needs of communities in the harsh weather. As a result, Johnson said Cargill had to mine or ship in additional salt for last winter and this winter.

"All of our mines were going full-out," she said. "It caught everyone by surprise. Folks were scrambling to find salt."

The additional cost of mining and shipping in the salt led to the price increase, she said.

Columbiana County Engineer Bert Dawson said the cost fluctuation can be both frustrating and understandable.

"It's just like oil. It drives you crazy but the price goes up with supply and demand," he said.

Robert Callen, the director of the Lawrence County Regional Council of Governments, added, "You always complain when it goes up."

Callen, however, also said that he has not received any complaints about salt costs from the 21 communities represented by his organization.

Morton spokesman Joe Wojtonik said his company also had to mine additional salt to meet the demands of communities this winter. Officials in those communities wanted to buy more salt than in the past to ensure that they weren't caught off guard by another harsh winter, Wojtonik said.

"Customers were worried that the same thing was going to happen this year," he said.

Both Wojtonik and Johnson said they were unaware of the Justice Department's letter until contacted by The Vindicator.

Target: Richard Hanneman, the president of the Salt Institute in Alexandria, Va., said he believed the salt industry made an inviting target for a Justice Department probe because salt companies receive tax money. The Salt Institute is the North American trade association of salt manufacturers.

Callen said the salt industry is very competitive, and he agreed with Wojtonik and Johnson's assessment that the price increase is a result of the "ebbs and flows" of supply and demand. He added that the Justice Department has investigated the industry in the past, and that he expects future probes to find no wrongdoing on the part of the salt producers.

"We don't think they're going to find anything," Callen said.

hill@vindy.com




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