The European Parliament Agriculture Committee's vote to extend EU sugar quotas until 2020 will have a negative impact on the confectionery industry and puts small and medium sized manufacturers at risk, according to European Sugar Users association (CIUS).
The European Parliament’s Agriculture Committee yesterday voted to extend the current regime until October 2020 instead of ending sugar quotas at the earliest opportunity in 2015. A plenary Parliament vote is scheduled for the week commencing March 11 with a final decision due by June.
Robert Guichard, sweeteners procurement manager at Mondelez International and president of CIUS told ConfectioneryNews.com on behalf of European sugar users that the latest committee decision was “unacceptable”.
“We have a system that is not working correctly,” he said.
According to Guichard, confectionery companies were unsure when their sugar would arrive, harming competitiveness and propensity to take risks.
“The small and medium companies are suffering,” he said.
German Confectionery Association BDSI recently told this site that sugar confectioner van Netten was forced to close resulting in 110 job losses, predominantly due to high sugar costs.
The European Commission announced in December last year that it would release 1.2m metric tons of additional sugar onto the EU market as a special measure.
CIUS welcomed the move. However, Guichard said that the measure would only guarantee supply in 2013 and the situation from 2014 to 2020 remained precarious.
He said the Commission would need to implement exceptional measures every year, as it has done for the past three, to prevent shortages.
“How can it be exceptional if it’s happening every year,” said Guichard.
Special measures every year?
He added that by introducing these measures the commission had acknowledged that shortages exist.
“The Commission knows there is a problem,” he said.
CIUS, whose members include Mars, Mondelez, Ferrero and Nestlé, will be pressing the European Commission to introduce special measures early on each year to ensure the market is well stocked.
It said that the quota system had led EU beet sugar production to fall 20% short of EU demand, causing a 47% price hike between October 2010 and October 2012.
Confectioners are able to buy sugar from outside the EU, but will incur an import tariff of around €400 ($533) per metric ton on top of the market price and transportation cost.
Tim Innocent, chair of UK Industrial Users of Sugar Group (UKISUG) and head of purchasing, direct materials, at Nestlé, told a UK House of Lords Select Committee in July last year that the market was constrained and said quotas needed to be abolished in 2015.