Tulare County caught in the middle of pistachio law suit

Wonderful Pistachios sues Tulare County for allegedly issuing illegal permits to their competitor Touchstone Pistachios

TULARE COUNTY – The nation’s biggest farmer and largest pistachio processor, Wonderful Pistachios, has sued Tulare County in hopes of shutting down construction of a nut plant owned by a rival company, ARO Pistachios.

Wonderful argues in a July 14 lawsuit in Tulare County Superior Court that permits approved by Tulare County were “illegally issued” and with a potential record harvest approaching in weeks, Wonderful owner Stewart Resnick wants construction halted at one southern Tulare County farm.

Wonderful says in their legal filing that Terra Bella grower ARO Pistachios, now owned by Touchstone Pistachios which is run by the Assemi family in Fresno are, “now hurriedly building that huge facility with those unlawful permits.”

Clearly the competitive juices are flowing in an industry where a handful of players dominate. Here, the top player looks to edge out an upstart with a likely a billion pound pistachio crop hanging heavy on the trees.

Nut case hearing set

The nut case has been set for its first hearing Sept. 1 at the Tulare County Superior Court in Visalia. Also scheduled soon, an appeal hearing in front of the Tulare County Board of Supervisors on Aug. 25.

ARO and Touchstone claim Wonderful have, “been incrementally transforming a small, local pistachio processing facility into a massive, regional pistachio processing facility on prime farmland in Tulare County.”

Wonderful calls the Terra Bella project a ”massive industrial agricultural operation” with permits to add eight nut storage silos to the 12 they already have.

But “massive” and “industrial” may better characterize Resnick’s operations in the state as California’s largest citrus grower, largest nut farmer, largest pomegranate processor, Fiji Water and Justin Wine owner and one of the state’s biggest water users.

If the count of nut storage silos is a good measure – the industry ranks production this way – Resnick’s San Joaquin Valley nut plants are clearly impressive. His Lost Hills nut plant has around 150 storage silos, the King facility south of Kettleman sports around 77 silos and his newer Firebaugh pistachio plant has around 90 silos as seen on a Google search.

By Wonderful’s own account, the company cultivates and harvests more than 65,000 acres of pistachio and almond orchards and delivers more than 450 million pounds of nuts globally each year.

By contrast Wonderful’s lawsuit complains the competitor, the Terra Bella plant owner is bragging that it could grow into a facility “with a capacity of 50+ million [pounds].”

In an interview in the past Resnick says the strategy of doing heavy marketing of pistachios like the Get Crackin’ campaign, has helped him become a market leader.

“As a leader, we control almost 60 percent of the market and of the retail market in the U.S. we probably control a great deal more than that, and that market has grown because we’ve created a demand through advertising,” Resnick said.

Wonderful Pistachios was the fastest-growing snack brand in the United States and the number one tree nut brand in 2018 according to an industry publication. Together his Wonderful farming related enterprises generate some $4 billion in sales employing about 10,000 people according to published reports.

The Tulare County lawsuit is a replay of what happened in Fresno County last year when Wonderful sued another jurisdiction over permits issued to Touchstone for a new plant in western Fresno County.

In that case in January of this year, Wonderful was successful in shutting down the construction underway and required Touchstone to go back to the approval stage with the county. The proposed plant with 49, 52-feet-tall silos won’t be operating this year as an effect. They have reapplied to Fresno County in June 2020.

Touchstone and the Assemi brothers used to partner with Resnick’s company but a falling-out appears to have precipitated this “Pistachio War” now having spread to Tulare County. For 15 years, Assemi owned farms have provided pistachios to the Wonderful Company as do other growers helping to bolster the Wonderful nut empire Resnick counts on.

In Fresno, Wonderful employed California Environmental Quality Act (CEQA) rules to bolster their arguments. The strategy appears clear: block this rival former partner from ramping up production. In that case the county, under a settlement with the Assemis, issued a stop- work order after finding unpermitted construction on the property near Cantua Creek, not far from Interstate 5.

Wonderful argues that Tulare County like Fresno County did not follow CEQA rules.

According to court documents, Wonderful claims the county acted improperly approving “illegal issuance of building permits to allow the final transformation of a facility intended to process locally grown product to a plant intended to serve pistachios grown up to one hundred miles away and across the entire San Joaquin Valley.”

Collateral Damage?

Tulare County officials deny the claims and say they look forward to telling their side. The Aug. 25 hearing should give them a chance in the public arena. Resource Management Agency associate director Mike Washam says all standard procedures were followed.

What does the Assemi family say about all this? In a July letter their attorney wrote that in its appeal of routine building permits for previously approved silos at the ARO facility, “the Wonderful Company expanded its war with the Assemi family to make owners and employees of the ARO facility’s as well as Terra Bella and Tulare County, collateral damage in their war against a local pistachio farmer.”

Their attorney asked how Wonderful is being harmed by the ARO plant expansion? The Assemi’s argue the “impact” is not physical or environmental impact on their company or any property they own or occupy.” Only a hit to their profits. The Wonderful filing says they own 132 acres of citrus within 2 miles of the ARO plant and 4,500 acres in Tulare County.

The Assemi’s complain Wonderful’s actions are an anti-competitive abuse of CEQA actually used against Wonderful in Kern County by a union to stop a project there. In opposing the union action Wonderful’s attorneys argued the union utilized an “extortionist business model” of using CEQA for economic advantage.

The growth the pistachio business has been breathless in California ramping up from just 117,000 pounds in 1990 to 994,000 pounds in 2018, the last “on year” with this alternate bearing crop. This year’s harvest is another “on-year” and all hands are on deck to defend it.

One ag economist predicts California pistachio production could exceed 1.4 billion pounds by 2026, given trees planted over the past five years, a conservative projection for new planting in the next three years, normal weather patterns, and no major interruptions to water supplies. The crop alternates in an “on and off” year pattern with significant production swings.

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