R&R Ice Cream backs calls to abolish sugar quotas

By Mike Stones

- Last updated on GMT

Related tags European union

Sugar quotas inflate prices and blunt efficiency, claims the industy
Sugar quotas inflate prices and blunt efficiency, claims the industy
European Union (EU) sugar quotas significantly inflate consumer prices and should be abolished at the earliest opportunity in 2015, James Lambert, ceo and executive chairman of R&R Ice Cream, has told FoodManufacture.co.uk.

The head of Europe’s largest own-label ice cream manufacturer said that the sugar regime had driven prices up by 40% in the past year, which had resulted in much higher prices for consumers.

“UK sugar prices have reached €880/t compared with their price 12 months ago. That is causing significantly higher prices for consumers,”​ he said.

Sugar quotas should be ditched to allow manufacturers and growers to work together to plan production, he said. “We know in advance, within 2,000t, how much sugar we will need in two years’ time. We need a system that allows us to buy sugar at a competitive price ​[not one inflated by sugar quotas].

The firm currently produces 200,000 pallets or 180M litres of ice cream a year.

Technical efficiency

Lambert praised the close working relationship the potato processor McCain had established with its growers. “McCain works closely with its growers to improve technical efficiency and secure supplies at an agreed price,” ​said Lambert. He said he would like to develop a similar relationship with UK sugar beet growers.

The growing popularity of growing crops for biofuel was also putting pressure on the global market for sugar, he added.

Lambert confirmed that the firm is looking to acquire more European businesses after buying several last year. "We are looking for a business in Italy and two businesses in Poland are for sale,"​ he said.

Lambert’s criticism of the EU sugar regime followed renewed calls from the UK Industrial Sugar Users' Group (UKISUG) to abolish sugar quotas in 2015.

Speaking on behalf of UKISUG, Richard Laming, media director with the British Soft Drinks Association, told FoodManufacture.co.uk that artificially high sugar prices caused by quotas were blunting competitiveness and costing jobs in a wide range of businesses.

The UKISUG group includes manufacturers of soft drinks, biscuits, cakes, chocolate, confectionery, breakfast cereals, ice cream, yogurts and chilled desserts. Its members employ more than 70,000 people and have a combined turnover of more than £12.3bn.

Not fit for purpose

Laming said: “The EU sugar regime is not fit for purpose. It is inflating EU sugar prices to levels that are much higher than world prices and that has caused firms to lose jobs​ [which otherwise would not have happened].

UKISUG has called for the European Commission to:

  • Abolish beet production quotas at the earliest opportunity on September 30 2015 for both sugar and isoglucose as proposed.
  • Reduce disproportionately high import tariffs ​in advance of 2015. That would ensure sufficient imports reach the EU market to guarantee security of supply and to promote market competition.
  • Guarantee adequate imports of duty-free cane sugar ​after 2015. This is needed to ensure that all sugar producers can compete effectively and ensure security of supply.

Manufacturers using sugar in processed products account for about 70% of UK usage or nearly 1.2Mt.

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