2015 sugar quota deadline must be adhered to, say soft drink makers

By Jane Byrne

- Last updated on GMT

Related tags Sugar United kingdom

Growth opportunities are being stymied in sectors such as the soft drinks industry due to uncertainty over sugar supply in the EU market, claims a leading UK trade body.

Speaking to FoodNavigator.com this morning, Richard Laming, spokesperson for the United Kingdom Industrial Sugar Users Group (UKISUG), stressed that the European Commission (EC) definitely needs to ensure that sugar beet production quotas are abolished by September 2015.

“There should be no delays in terms of eliminating quotas from the system - this deadline needs to be adhered to,” ​he urged, adding that there have been calls in some quarters for the Commission to defer the end of quota system until after 2015.

At both UK and EU level, UK sugar users operate in increasingly open and competitive markets, said UKISUG. To succeed, industries from the manufacturer of soft drinks, biscuits, cakes, chocolate, confectionery, breakfast cereals, ice cream, yogurts and chilled desserts must have access to adequate supplies of safe, high quality and competitively priced sugar, it said.

“The current system of production quotas and import tariffs restricts the availability of sugar and reduces competition in the EU sugar market,”​ argues the association.

The situation in the marketing year 2010/2011 was particularly challenging in terms of supply in the bloc, with world market prices above EU levels for the first time, and sugar exports from emerging nations, normally imported into the EU duty-free, diverted to the world market to benefit from those more attractive prices.

And Laming said production lines in the UK have been hit intermittently as a result of the sugar shortfall.

Soft drink manufacturers have been tending to deter investment as a result and growth opportunities have also been missed, added the UKISUG spokesperson, due to the fact the sector has not had a reliable supply of a vital ingredient over the past 18 months or more.

“Processors may look to diver investment to outside the EU if uncertainty in supply continues or if the Commission doesn’t take some interim measures immediately​,” warns the UKISUG representative.

The association is calling for action on imports now, calling for reduced import levies in advance of 2015 to help ensure sufficient supply and to promote greater competition in the sugar market.

It also wants a guarantee on adequate imports of duty free cane sugar​after 2015 to ensure that “all sugar producers can compete effectively in the market place as well as ensuring security of supply.”

UKISUG represents the collective interests of the major industrial users of sugar in the UK, comprising confectionery, chocolate, cakes, biscuits, soft drinks, fruit juices and ice cream.

These sectors represent combined employment of 70,000 people and are worth £12.3bn in consumer sales per annum. Manufacturers using sugar in processed products account for about 70% of usage in the UK or nearly 1.2 million tonnes. UKISUG members therefore have a direct and vital interest in the EU's sugar regime.

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