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PART THREE:
THE CANDY MAKERS
Use of lead-tainted ingredients in some candies made in Mexico raises ethical questions.

Tuesday, April 27, 2004

By JENIFER B. McKIM and WILLIAM HEISEL/ The Orange County Register

MORELIA, MEXICO – Workers in the Dulces Moreliates candy factory flatten globs of sweetened tamarind and chili paste into long, sticky sheets. They roll them together tightly and cut them into slim, brown coils that look like sleeping snakes.

Hence, their name: Serpentinas.

Hair tucked under caps and faces masked, crews nearby prepare the wrappers - rolls of plastic designed with bright orange lettering.

Serpentinas are popular treats in Mexico and among Latinos in the United States. Orange County's ethnic markets, convenience stores and big chain stores all carry them.

But there is something dangerous about the way these candies - and others in Mexico - have been made.

Something about the recipe.

Tests show that chili powder, tamarind and ink in wrappers all have had levels of lead that can cause brain damage in children who regularly eat Mexican candies. At least eight Mexican candy companies have been penalized by U.S. health regulators for producing candy that tested high for lead. State and federal agencies have issued public- health advisories, forcing stores to pull the candies off their shelves and change their candy- making methods.

But instead of cleaning their candies for kids everywhere, some companies have made a cheaper choice.

They sell candies that can be dirty and prone to high lead levels to kids in Mexico. When they make a product for export, they switch gears.

At the Serpentinas plant last summer, that meant workers scrubbed the candy- making machines. They pulled out stores of more costly, sterilized chili and clean apple pulp. They whipped up a different batch of Serpentinas - still a sleeping snake but without the poisonous bite. Then they wrapped the harmless candies in clear, transparent plastic, minus the toxic ink.

Same candy, two recipes.

One tastier, cheaper and often registering toxic lead levels for the Mexican market. The other more bland, more expensive and formulated to pass muster with U.S. health regulators for export across the border.

Both versions of Serpentinas, and many other candies made two different ways, are sold in Southern California markets, sometimes without the manufacturer's knowledge, an Orange County Register investigation found.

In the case of Serpentinas, the two versions come in different packages.

But in other cases, candies are packaged in a way that prevents parents from telling the difference between a clean candy and one that might poison their children.

And within any given bag of candy, each piece is different. The lead shifts and settles during the mixing of ingredients, so some pieces will test high while others will test lead free.

As a result, a simple candy purchase becomes a game of Russian roulette.

The U.S. Food and Drug Administration and California regulators have known about the problem of different versions at least since 2002, internal memos show. Yet, they have not done comparison testing of the two versions, including Serpentinas. They haven't worked with companies in Mexico to make sure the two versions are easily distinguished. And they have done almost nothing to address the problem of these candies crossing into the United States. Over the past three years the FDA, which screens food products at the border, has averaged fewer than four candy tests per month, according to records.

The Register tested 180 samples of Mexican candy for this series from 25 distinct brands. Eight brands, or 32 percent, had high lead levels.

For today's story, about 70 candy samples from seven brands were tested because they are made two ways. Some candies were bought in their original Mexican-market packaging. Others were bought directly from distributors and candy makers in Mexico before the candies crossed the border.

Four of the seven brands measured high for lead in Register tests. In some cases, the lead levels were six times California guidelines. In all of these candies, the levels measured so high that a child's lead consumption would surpass acceptable daily levels, as set by the FDA, with a single treat.

Register tests of sister products meant for sale in the United States came out clean.

The few candy makers who admit to making candy two ways point to economics, cultural preferences and different food-safety requirements. Products shipped to the United States have to meet specific standards for filth, food colorings and lead content. Mexico has similar guidelines in some areas but does not have the regulatory muscle to enforce them or to educate the industry. Mexican health agencies lack the resources to license or inspect all the country's candy makers, and candy testing is rare. Mexico has taken action against candy makers when prompted by sanctions in the United States.

But the bottom line is this: Mexican candy makers don't believe their products pose any danger.

"We can argue back and forth about what is safe, but as always in business you try to do what you are told by your experts is safe and you go by that and try to serve whichever markets are available," said Luis Antonio de la Torre, the general manager of Mexican candy giant Dulces Vero's Texas subsidiary, which exports cleaner candy to the United States. "We are not trying to hide anything or trying to cut any corners."

Parents and consumer advocates say candy makers put profits before people's health.

"I don't think that Mexican kids are more resistant to lead than kids elsewhere," said Dr. Herbert Needleman, a pioneering lead-poisoning researcher at the University of Pittsburgh. "The evidence is clear on how lead damages kids. It's up to (the companies) to do the right thing."

MEXICAN CANDY SALES UP

Mexico is the birthplace of America's favorite candy: chocolate.

The Spaniards under Cortez found the Aztecs in 1519 sipping a cocoa-bean drink from golden goblets in religious ceremonies, believing it a divine gift.

Through Spain, chocolate spread around the world in different forms, with the first candy bars appearing in the mid-1800s. In Mexico, chocolate gave way to candies that made better use of some of the country's most abundant crops: sugar, chili and tamarind, a fig-like fruit that grows in pods.

Today, the country's roughly 1,500 candy makers range from mom-and-pop shops on rural roads to large companies with offices worldwide. Unlike the U.S. market, which is dominated by heavyweights such as Hershey and Russell Stover, more than 80 percent of Mexico's candy makers are small, family businesses.

Mexican candy companies can't depend on the domestic market, where candy consumption totals about $6 per person annually, one of the lowest per-capita spending rates in the Americas. In the United States, that number is more than $50 per person, generating $15 billion in annual sales.

That's why, with the help of U.S. candy makers who have bought Mexican companies or built their own, Mexico has more than tripled its candy sales in the United States since the North American Free Trade Agreement went into effect in 1994. The Mexican candy industry is expected to grow to $880 million by 2006.

CLEANER CANDIES COSTLY

Mexican companies have a strong financial incentive to make two products.

The versions they make for Mexico cost less - as much as five times less for some ingredients, company officials and candy distributors say. If small companies were forced to make all their candies to a higher standard, some say, they would go out of business.

And the cheaper candies appeal to the local palate. Heavy-duty washing that occurs in U.S. versions not only eliminates dirt and lead but can dull the flavor.

Many companies declined to talk about the manufacturing process or, despite evidence to the contrary, denied that they make two versions.

But others defend the practice. Antonio Mora Mendoza at Dulces Moreliates says his company tailors Serpentinas to fit consumer demands and government regulations in each market.

Mexicans prefer tamarind. They like its distinctive tang and texture. But U.S. regulators have found tamarind to be dirtier than rules allow. Nearly 10 years ago, the FDA ordered all tamarind products stopped at the border. So, Mendoza says, he doesn't send tamarind products to the United States.

State testing records show that 45 percent of all Serpentinas samples have tested high in lead. One candy wrapper had among the highest lead results ever seen by the state: 15,000 parts per million. That's 25 times the state guideline.

Wrappers worry health advocates as much as the candies themselves because the toxic ink from the wrappers can leach into the candy. Kids also lick the gooey candies off the wrappers. A child chewing even a shred of that Serpentinas wrapper would exceed the daily lead-consumption limit.

When the Register tested two versions of the candy and their wrappers, a clear difference emerged.

The U.S. version of Serpentinas passed, but the Mexican version - bought in Orange County - showed lead levels twice what the state considers a potential health threat. The Register tested five samples of each version.

Mendoza, who represents the latest generation to run the small, half-century-old family business, says he doesn't believe the state of California's body of evidence against his candies. He knows the candy-making process from the inside out. The former engineer hand-built some of the equipment used to grind, press and cut the candy.

He showed the Register his company's own test results, which found the candy to be clean.

"It's all good. It's well- made," Mendoza said in June. "(U.S. importers) ask me to send it differently."

But last month, Mendoza told the Register that he began using cleaner chili for both versions of his candy, although he continued to use tamarind and the colorful wrappers with ink on the plastic for the Mexican version.

Mendoza makes about 3 percent of his candy for export. Like most candy companies that make two different products, the vast majority of his candy production, at least in theory, goes to market in Mexico.

Vero, one of the largest Mexican candy companies, makes less than 5 percent of its candies specifically to meet U.S. regulations, company officials said.

But large U.S. distributors buy the Mexican versions across the border and truck it over. So do small-time entrepreneurs who deliver the goods to convenience stores and ice cream trucks around Orange County.

Unless a candy is the subject of an FDA alert, importers can legally bring it in. In most cases, candies pass through the border. If distributors knowingly ship candies that contain high amounts of lead, they could face penalties, but the Register found no instances where this had happened.

This goes a long way toward explaining why parents in Southern California are more likely to buy the Mexican version of the candies.

MAKERS QUESTION TESTS

In the foothills of the Sierra Madre mountains, Effem Mexico takes extreme measures for candies headed to the United States. The company makes products under the Lucas brand name.

The Santa Catarina company buys chilies from farmers who meet strict guidelines. Chilies must be picked before they ripen so they don't have a chance to attract bugs and become dirty. They must be washed vigorously and dried indoors.

For Mexico, the chilies ripen on the plant. Then, without being washed, they are set in the sun to dry.

U.S. candy company Mars Inc., one of the largest private food producers in the world, bought the Lucas product line in 2001. Mars officials insist their products do not and have not contained high amounts of lead.

But federal and state testing records show these Lucas candies tested high 20 times since 1994 - more than half the time tested. The candies include the popular Lucas Acidito, a chili-and-salt mixture children like to pour directly onto their tongues.

It's unclear whether Lucas candies have tested high since Mars bought the company. FDA tests provided to the Register show that three Lucas candies were high sometime between October 2000 and November 2002, but the records don't specify dates.

Mars officials said they had not been notified by the state or the FDA about high lead results.

Tim Anh, the director of quality services for Mars' snack-food subsidiary, said the company allows a little more dirt in its candies meant for Mexico because, frankly, more dirt means more flavor.

It's not that dirt tastes good, but washing chilies removes what are known as "flavor compounds," Anh explained. Unwashed, sun- dried chilies have more pop.

"The export variety is lower in insect fragments than the one that we sell in Mexico because of the regulations in the U.S.," Anh said.

Register tests found that unwashed chilies can be a source of lead, but Anh said the company's own tests on both versions of the candy have not shown problems. He declined to share specific numbers.

Another company that said it doubts California's testing numbers sits on a side street in central Mexico in the busy city of Morelia.

Industrial Dulcera Tasachi makes Chaca Chaca candy bars out of apple pulp and chili. The candy has tested high for lead in 17 state and federal tests since 1998.

The Register tested seven samples of this candy. The versions meant for Mexico tested high in lead twice. The versions meant for the United States showed no lead. After repeated questions about Chaca Chaca from the Register, the state and the FDA issued an advisory last month.

Before the regulatory action, Chaca Chaca attorney Agustin Bracho would not acknowledge that his company exported the candy to the United States, let alone that it was making a special U.S. product.

But the company that has imported Chaca Chaca for sale in the United States tells a different story. Victor Reyes at Triunfo-Mex Inc. in the City of Industry said his company has imported Chaca Chaca bars since 1991, at times in loads as big as 300,000 bars a month.

Reyes said many candy makers do not want to acknowledge the dual products because it could damage their business in Mexico.

"Many companies fear they will hurt their brand," he said.

For that reason, companies also shy away from labeling products differently, he said. That makes it all but impossible for customers to know what version they are eating.

Triunfo-Mex's massive warehouse is a tribute to the success of the Mexican candy industry in the United States. It brings in more candy than any other independent distributor, candy makers and wholesalers say.

Relaxed in the company's spacious meeting room, stocked with tequila, champagne and cognac, Reyes said nearly 50 of his clients produce export-only products with cleaner ingredients and lead-free inks to assure easier passage across the border. Reyes stopped importing Chaca Chaca last fall because he said the candy maker would no longer pay extra for cleaner chili.

"It is much more expensive for companies to do a product for export," Reyes said.

DIFFICULT TO DISTINGUISH

Despite the effort and expense in making two recipes, import and export versions can be hard to discern. Their labels often are the same, and, in some cases, the Mexican versions are dressed up to look like U.S. products.

Part of the reason is, again, economics.

Candy makers don't want to spend extra money on an entirely different package for the cleaner product. Companies that distribute the candy don't want them to change their packaging, either.

They hope Latinos who bought these candies as children in Mexico will want to buy them here now. It's why some Mexican candies - with pineapple wedges wearing sombreros, smiling bears and brooding cows - look quaint next to some of their slick American counterparts.

"A lot of my customers are in their 20s or 30s, and they like these candies because they grew up with them," said Estela Gil at Carlo's Meat Market in La Habra, which boasts a wide candy selection across from the butcher cabinet.

Even the companies have trouble telling the difference between the two versions once they are on the shelves.

Vero might use higher- quality chili for candies heading to the United States, but Vero executive de la Torre acknowledged that the bilingual packages used in both countries are identical. The one clue is a white paper square found on the outside of some candy boxes and bags. It says in English: "Imported and distributed by Vero candies ... San Antonio, TX."

The Register bought a box of Vero's Super Palerindas lollipops packaged like this and sold at an Anaheim store. Lollipops tested from this box were found to be free of lead, but the Mexican versions, which are much more prevalent in Orange County stores, showed high lead levels.

The Register found the Mexican version in dulcerias from La Habra to San Juan Capistrano. These candies also are widely available at grocery stores - usually in the same aisles as Snickers and Junior Mints.

IT'S IN THE BAG

There are dozens of firms around Southern California that buy the candy, put it in their own bags and sell it at a premium.

The re-bagging process can accomplish at least two key goals. By putting an English label on the bag, a Spanish-only product becomes compliant with FDA and California labeling requirements. And by making all the bags uniform in size and shape, they can be more easily stacked on store shelves or hung on racks next to the checkout counter.

The twist is this: The candy maker no longer has quality control.

Chula Vista-based El Pecas buys Vero Mango lollipops, adds its own chili, then puts the candies in bags that don't identify them as Vero pops.

The Register tested 10 samples of Vero Mango lollipops that were not re-bagged by El Pecas - both import and domestic versions. All came up lead free.

But mango lollipops packaged by El Pecas had high lead levels.

El Pecas manager Mayte A. Flores said she was surprised by the results and intended to do her own testing.

"Every time we buy candy, we want to make sure we are not poisoning the kids," Flores said. "I don't want to hurt the kids."

But Flores did not test the candy on her own. Instead, she phoned Vero officials, who told her there were no problems. She said she took their word for it.

At Vero, de la Torre said he didn't know repackaging companies bought his candies and sold them as their own.

"I know with the product we import for the United States, we haven't had problems," de la Torre said. "I don't analyze products in Mexico and others that are being repackaged by somebody."

SUPERHERO PITCH

Candy lovers in the United States have been buying sweets made in Mexico for years without knowing it. It's simply a fact of the changing marketplace that more and more candy is made south of the border.

In 1969, Hershey opened one of the first U.S.-owned candy factories in Mexico. Since then, nearly all the major companies - Tootsie Roll, Nestle, PepsiCo - have opened plants there, mainly to take advantage of cheaper sugar and labor. They ship candies back to be sold in the United States.

Customers probably haven't noticed a difference. Hershey's Giant Kisses still look like Hershey's Giant Kisses.

Similarly, when Mars bought Grupo Matre in 2001, it maintained the candy company's line of popular Lucas candies.

"They wanted to appeal to the Hispanic consumer, especially in the Southwest, where these are recognized brands," said Jim Corcoran, vice president for trade relations at the National Confectioners Association.

There are few bigger brands than Superman. His image and the images of other cartoon characters that have an international following are used by candy companies to make candies recognizable on both sides of the border. Winnie the Pooh, SpongeBob SquarePants and the Incredible Hulk are featured on Mexican candies that can be found in Southern California stores.

Superman sells small cups of Duvalin, a creamy candy that tastes like chocolate frosting. The candy is made by Joyco, which has offices in Miami and Naucalpan, Mexico. Bart Simpson sells a chili-coated mango lollipop for Vero.

Both Warner Bros., which owns Superman, and Twentieth Century Fox, which owns the Simpsons, struck deals for these candies to be sold only in Mexico.

Yet, the Register bought both these candies in Orange County. And both tested high in lead. The Duvalin candy has a U.S. version that did not test high.

Vero said it had an arrangement with Fox, but Fox would not confirm the deal. Warner Bros. said it intends to look into the quality of the Duvalin candy. Joyco's license to sell candies featuring Superman and his fellow crime fighters expired in October.

SELF-POLICING SUGGESTED

The uncertainty about how the candy is made and how much lead might be inside scares and infuriates parents like Jose and Lorena Beltran.

The Anaheim couple is cautious when it comes to their three young sons. They bought three car seats for each of their cars and three more for the baby sitter's car.

"You can never be too safe," Jose Beltran said.

When the Anaheim couple learned that the candy their kids were eating at a birthday party last November might contain lead at levels high enough to damage their still-growing brains, they were shocked.

Jose Beltran grew up in the San Fernando Valley and spent half his weekends in Tijuana with his grandparents, aunts and uncles. His kids eat some of the same candy he ate as a child. It is hard for him to fathom that the mango lollipop his youngest child loves might be toxic.

What's worse, Beltran said, is the decision by candy companies to make an inferior product for Mexico.

"They should care about all kids, not because of where they're from but just because we're all human beings," Beltran said. "It all comes down to greed."

Runako Kumbula, a lawyer at the consumer-watchdog group Public Citizen, said that without clear regulations, companies don't feel any urgency to make the same safe candy for the Mexican and U.S. markets.

"Morally, they're doing something wrong, but legally, perhaps they're not," Kumbula said. "There are lower standards in probably a zillion different areas in Mexico than there are here, and in some areas, they probably have higher standards. That's the way it is, and corporations are taking advantage of it."

Other health advocates for children said they've seen this pattern before.

"It's eerily reminiscent of the actions that the lead-paint manufacturers back in the early part of the 20th century took when they knew their product had lead in it and chose to market it anyway," said Eileen Quinn, deputy director for the Alliance for Healthy Homes, a lead-poisoning prevention group in Washington, D.C. "They are acting with deliberateness to put profits before public health."

When told about the two-candies practice in late April, the governor of Michoacán, home to Morelia and one of Mexico's largest candy-producing states, responded with indignation.

"Someone's health is worth the same here or there," said Gov. Lazaro Cardenas Batel. "We should find a way to have the same quality level for the two sides."

Some companies have decided higher profits don't merit the risk.

Grupo Lorena makes its signature brand, Pelon Pelo Rico, with two kinds of chili. Like Mars, officials say that the difference in washing does not affect quality but results in a more spicy version for Mexico. Because of the Register's findings, the company said it intends to follow stricter guidelines to limit the amount of lead in its products. The company has had a history of lead problems. California testing records show high lead results for the candy 11 times since 1994.

The company now tests its candy every day, said spokesman Javier Arroyo, and has not found problems with lead. The Register tested both the domestic and export versions of Pelon Pelo Rico last year and found no lead in 10 samples.

Arroyo suggested that candy companies start policing themselves better. Tuna companies that make sure dolphins are not inadvertently caught in their nets stamp their cans with "dolphin-safe tuna." Candy companies could form a "Lead-Free Candy Association" with a similar aim, Arroyo said.

"But it's very hard to make all the companies forget about the fighting in the market and decide to solve something together," Arroyo said.

Alpro Alimentos Proteinicos in Mexico City makes a sweet-and-spicy powdered candy packaged in brightly colored wrappers at its plant.

General Director Francisco Canovas Corral said he struggled to improve the reputation of his candy company after California regulators found high levels of lead in wrappers in 1994.

The candies - Brinquitos - were found in the home of a lead-poisoned child in San Bernardino.

Canovas Corral was hit with regulatory action on both sides of the border, and the company shut down for nearly a year. After regaining its footing, the company began using organic, lead-free inks for all its products. Packaging costs doubled.

U.S. and California regulators hailed Brinquitos as an example of successful government involvement, internal state documents show.

Canovas Corral said that although he doesn't export directly, he knows his candy is sold in California.

"We can't control contraband," Canovas Corral said. "If I make a box of Brinquitos for Mexico, I won't be able to stop the candy from going to Tijuana and then San Diego. It's a serious problem."

One candy - the kind that comes in a lead-tainted pot - has been largely driven out of U.S. stores because of concerns about lead, but it continues to poison Mexican children.

In one of the cruel ironies of the developing world, though, this same candy helps keep hundreds of poor families in a Mexican village afloat.

Tomorrow: How children have been poisoned in a village in central Mexico.