Tue | Aug 22, 2017

Refined sugar standards apply to even corner shops

Published:Friday | February 10, 2017 | 2:00 AMTameka Gordon

All retailers of refined sugar will have to align themselves with licensed packing companies by July 1, when the recently announced standards for packaging come into effect, says Bureau of Standards Jamaica (BSJ).

The packing entities themselves must also implement food safety systems such as the Hazard Analysis Critical Control Point or HACCP, standards by January 1, 2020, as the Ministry of Industry, Commerce, Agriculture and Fisheries moves to streamline the sector.

In December, the ministry announced packaging and labelling standards for brown sugar, but has expanded this to now incorporate refined sugar, otherwise called granulated sugar.

The refined sugar market now sees a few companies packaging the product, among them GraceKennedy Limited, DK Processors Jamaica Limited, Palm Rose Commodity, DK Processors Jamaica, Sue Pat Sales and Jamaica Cane Product Sales, which packages through Caribbean Depot Limited.

Smaller sellers such as corner shops and supermarkets must all now forge partnerships with these licensed repackers in order to continue selling the product, the BSJ told the Financial Gleaner via email.

Government has long contended that refined sugar meant for manufacturing has been finding its way into the retail trade. However, manufacturers have consistently pushed back against the allegation.

Both sides remain at odds over the issue.

Disincentive

So, aside from improving food safety, "the standard will also serve as a disincentive for manufacturers that import sugar for use as raw material to divert it to the local retail trade", the ministry said in a media release.

"The white sugar standard states that the sugar for retail sale must not be packaged at the point of sale," the BSJ added.

Both brown and refined sugar must now only be packaged by licensed entities under the new regime, the BSJ said, adding that its inspectors will conduct surveillance of the market "in order to ensure compliance".

Furthermore: "In order to comply with the requirements of the white sugar standard, sugar for the retail trade must be purchased from registered re-packers," said the standards agency.

The refined sugar consumed by Jamaica is all imported. The market currently operates on two tiers - a retail segment that pays duty on its imports and distributed to grocery stores; and volumes used by manufacturers as raw material input, which are imported duty-free.

However, the ministry and regulators have, in the past, charged that manufacturers have been reselling the product to retailers at a profit to them but at a loss for Customs.

The implementing of the packaging standards and, by extension, the overhauling of the sector, comes after several other initiatives aimed at streamlining the industry.

In 2014, then Minister of Agriculture Derrick Kellier moved to have all imports of refined sugar handled by the Sugar Industry Authority (SIA). This was, however, met with pushback from manufacturers who contended the SIA could not handle sourcing and delivery of refined sugar effectively enough to meet their needs.

A US$35-per-tonne cess on refined sugar was also proposed but was shot down by processors.

Talks were scheduled between stakeholders and the Government regarding the way forward for the cess, but "this has died a natural death," Jamaica Manufacturers' Association President Metry Seaga told the Financial Gleaner on Tuesday. The meeting never happened, he said.

In 2015, some 361 entities were licensed by the Trade Board to import refined sugar with permits issued on the recommendation of the Trade Board's Sugar Advisory Committee, after reviewing import applications. For 2016, some 378 entities were licensed.

The new packaging standards are meant to, once and for all, bring the refined sugar industry within the scope of governmental monitoring and ensure that food safety standards are maintained.

tameka.gordon@gleanerjm.com