PureCircle cleared of 'forced prison labour' accusations

By John Reynolds

- Last updated on GMT


Related tags Supply chain

Stevia maker PureCircle today (Tuesday) said it would “leave all the options open” as to whether it would seek compensation after it was “cleared” following a dispute with the US authorities over whether stevia imported from China was produced by forced prison labour.

PureCircle today reported that sales were down 13.4% to $47.2m (€44.6) in the six months to December 31, after it was denied access to the US market in the period as a result of being put on US Customs & Border Protection (CBP) Withhold Release Order (WRO) list costing the company around $15m (€14.2m) in lost sales.

PureCircle said it’s now keen to revive US sales, which account for a third of overall revenues, after being cleared by the authorities and taken off the WRO list on January 30, following an audit of its supply chain.

Questioned by Food Navigator whether it would seek financial compensation following the dispute, PureCircle chief executive Magomet Malsagov said: “The board keeps their options open but we haven’t discussed this at all. What we will or will not do will be deliberated at the board meeting.

“The CBP has done a thorough audit of our supply chain and as a consequence of that removed our name from its Withheld Release Order.The fact that the company has been cleared within a relatively short period of time after a thorough audit means that its supply chain was robust. And the fact that we have been fully cleared actually re-emphasises that the supply chain is good and PureCircle knows what’s it’s doing.”

He said the focus was now on getting its US sales back on track and helping its clients launch products in the US.

U.S. Customs and Border Protection said it moved to crack down on imports of stevia extracts and their derivatives from China brought into the US by PureCircle after it obtained information that they are produced by prison labour, a charge that PureCircle denied.

In its financial results, published today, profits at PureCircle in the six month period fell from $5m (€4.7m) last year to a loss of $700,000 (€662,000), after it was hurt by currency movements.

Outside of the US, sales grew in PureCircle’s other markets, spearheaded by double digit growth in Europe and Latin America.

The expected introduction of a sugar tax in the UK and South Africa amid an increasing number of markets looking to reduce sugar intake should spell good news for the plant extract stevia, which is used as a sweetener in Coca-Cola’s Coke Life and other fizzy drinks.

Malsagov said: “These underlying trends are happening and obviously it would be wrong to say it that doesn’t have an impact on PureCircle, although we are not out there encouraging that.

“What we are doing , though is working with our clients, global food and drinks companies very closely, helping them to come with the right tailored solutions to their brands, to reduce calories.”

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