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EU confectioners challenge proposals to postpone sugar quota abolition

By Oliver Nieburg+

18-Jun-2012

Confectioners in Europe are under threat from an MEP’s report proposing to postpone abolishing EU sugar quotas until 2020, according to industry bodies whose members include Mars, Nestlé, Kraft and Ferrero.

The Association of the Chocolate, Biscuit and Confectionery of Europe (CAOBISCO) and European Sugar Users (CIUS) are hoping for quotas to go by 2015 in the EU’s Common Agricultural Policy (CAP) reforms, but face opposition from MEP Michael Dantin who argues that the abolition should be delayed until 202.

Dantin is due to present his draft report to the Agriculture Committee in the European Parliament today.

Confectioners hit by rising sugar prices

Muriel Korter, economic affairs director at CAOBISCO and secretary general at CIUS told this site that EU confectioners were struggling amid a tight sugar supply situation, experiencing 40% price hikes in the past year.

“The confectionery industry is clearly hit by the market situation, especially SMEs.”

CIUS said that EU sugar beet processors have had ample time and funds since 2006 sugar market reforms to improve efficiency to become among the world’s most competitive, while the food sector had suffered unmanageable price instability.

Industry: quotas must go by 2015

Korter said that paying high transport costs to bring sugar in from elsewhere was simply not viable and confectioners would have to operate in a very uncertain and volatile market if quotas were not eliminated by 2015.

“It has to be 2015. The current situation is not acceptable,” she said.

Korter added that EU confectioners export around 10% of world production and on-going barriers to trade from extended sugar quotas would harm their competitiveness on the global stage.

A recent survey from German confectionery association BDSI found that the sugar situation had led many German confectioners to doubt their earning potential in 2012.

Out-of-quota release disputed

Dantin also proposes automatic release of out-of-quota sugar to preserve structural balances if a 2020 abolition were agreed.

However, CAOBISCO and CIUS would not welcome this move.

“This is far from being a positive step as it proposes more of the same ad hoc, hand to mouth market measures that exist today and which fail to provide sufficient security of supply visibility promoting market instability,” said CIUS in a statement.

The Commission released its proposals for reforms to the EU’s Common Agricultural Policy (CAP) on 12 October 2011, which included measures to remove sugar quotas by 2015.

It is now up to the European Parliament and the Council to approve the regulations.

MEPs have until 9 July to table amendments to the CAP reforms.

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