Abolishing sugar quotas would quash competition, says ASSUC

01-Mar-2013 - Last updated on 01-Mar-2013 at 12:13 GMT

ASSUC says abolishing quotas would concentrate the sugar market

European sugar traders have come out in support of continued sugar quotas to encourage a more competitive sugar market, according to trade association ASSUC (European Association of Sugar Traders).

ASSUC reiterated its position following the publication of an open letter to European leaders signed by 27 sugar-using industry associations this week. The letter implores leaders to scrap quotas by 2015 as promised, rather than hold on to them until 2020 – the preferred path among sugar producers.

Sugar users claim that quotas have kept European refined sugar prices artificially high, at about twice the world price, a situation that makes it difficult for smaller food companies in particular to afford European sugar.

But ASSUC argues that abolishing the quotas would likely concentrate control of the sugar supply in the hands of a few large players.

“The abolition of quotas is likely to encourage further concentration of beet sugar production in the hands of fewer agro-industrial groups,” it said in a statement. “EU sugar policy as a whole should promote and defend conditions which provide for a multitude of participants and for regional diversity, which ASSUC considers essential for a competitive market.

“ASSUC therefore supports the maintenance of the quota system for the EU.”

It also said that the quotas allow the European Union to provide preferential access to specific countries under certain negotiated free trade agreements.

“The EU sugar quota system provides reliable conditions for the effective implementation of these trade preferences,” the association said. “Without quota restrictions, beet sugar producers may be expected to endeavour to maximize their sales within the EU, supplying markets hitherto reserved for preferential imports.”

The issue is set for final vote by European Parliament plenary committee in the week starting March 11. At a January meeting of the Committee on Agriculture and Rural Development, leaders voted 33-11 to extend the EU sugar quota to 2020.