FOR IMMEDIATE RELEASE CONTACT: Phillip Hayes
August 6, 2012 202-271-5734 (cell)
From the International Sweetener Symposium:
New Study Urges Congress: Don’t Repeat Europe’s Mistakes
COEUR D'ALENE, Idaho—The job loss, price spikes, taxpayer costs, and supply interruptions seen in Europe following its 2006 sugar policy reform provide Congress a roadmap of what to expect if U.S. sugar policy is weakened, found a study released today at the 29th International Sweetener Symposium.
“In short, the 2006 EU Sugar Regime reform implemented many of the ideas promoted by opponents of the current U.S. sugar policy,” wrote Patrick Chatenay, a sugar and ethanol expert from the UK-based company ProSunergy.
“At considerable cost to stakeholders and without any measurable benefit to the consumer, the European Union has thus put at risk the safety of its supply of sugar,” he concluded. “Surely, there are lessons to be pondered here as American policymakers look to decide on the future of the U.S. sugar policy.”
Large candy companies are currently lobbying Congress to weaken U.S. sugar policy in favor of cheaper, subsidized foreign suppliers. Chatenay noted that since Europe made a similar decision:
• 83 EU sugar mills have been closed, leading to 120,000 lost jobs;
• Bulk refined sugar prices have increased 10 percent;
• Volatile price swings and supply shortages have plagued Europe’s sugar markets; and
• Sugar policy went from incurring little taxpayer cost to running €1.3 billion ($1.6 billion) a year.
The large European food manufacturers that lobbied for EU sugar reform are now desperately looking for adequate supply and complaining about “an increase of 40 percent in sugar price within the last year.”
European grocery shoppers meanwhile are paying 20 percent more for food products containing sugar. And, the European Court of Auditors has noted that any future reductions in sugar prices “are unlikely to be passed on to the final consumer” because “most of the cost savings due to price reductions will be added to the profit margin of industrial producers.”
Damage caused by the policy reform has extended beyond European borders to the EU’s traditional foreign suppliers as well. “St Kitts and Nevis, and Trinidad…gave up sugar production entirely despite a 350-year association with the industry,” Chatenay found. Fiji’s industry is likewise on the ropes and sugar suppliers from Swaziland have been caught in “debt bondage.”
In an attempt to cushion the blow for its traditional foreign suppliers, EU taxpayers funded a €1.2 billion ($1.4 billion) aid package. And “the damage done to small island economies…may require additional financial transfers in the future to prevent regional instability and security failures,” Chatenay explained.
The main lesson for the United States “has to be that, by letting imports determine the ultimate availability of sugar, the EU has lost control over its supply of this essential food ingredient,” he noted.
Audio & Video