Wed | Nov 25, 2020

Salada, JACRA back in court on Wednesday

Published:Sunday | September 13, 2020 | 12:18 AMKarena Bennett - Business Reporter
Dianna Blake-Bennett, general manager of Salada Foods Jamaica Limited.
Dianna Blake-Bennett, general manager of Salada Foods Jamaica Limited.

Salada Foods Jamaica Limited and the Jamaica Agricultural Commodities Regulatory Authority, JACRA, have been given more time for both parties to gather data for presentation of arguments before the Supreme Court.

JACRA has ordered Salada to change adjust its coffee quota to triple the Jamaican content in its blends, but Salada is seeking to block the enforcement of the rule in court.

The next hearing is set for Wednesday, September 16 at 10 am.

The parties appeared in court on Thursday following a letter from JACRA on August 11 which mandated Salada to increase the local coffee content in its Mountain Peak Instant Coffee formulation up from its current 10 per cent to 30 per cent starting September 1.

Salada on August 31, filed an application with the courts in an attempt to block the regulator, having failed to find middle ground with JACRA on its decision.

“The matter was brought before the judge. There is another court date for next week and so no decision has been made as yet,” Salada General Manager Dianna Blake-Bennett told the Financial Gleaner.

Salada is seeking orders of certiorari and mandamus, asking the court to quash, or cancel, the JACRA decision.

Under the mandamus orders, the judge can also order the state agency or official to take a particular action, such as ordering them to reconsider the issue and make a fresh decision.

The court is likely to weigh issues relating to the purpose for imposing the rule, and whether the regulator’s action breaches the rules of natural justice relative to Salada.

The Jamaican-owned company is the country’s sole instant coffee processor, and while is reported to have the largest market share in the instant market, though the Jamaica Mountain Peak brand, it operates in a sector populated with multiple coffee brands, including imports.

The squabble between the two parties has been ongoing for two years, shortly after JACRA was created and became operational. Their disputes have been over both quota requirements for coffee beans and the fees levied by JACRA on various aspects of coffee operations.

The commodities regulator, whose portfolio also spans cocoa and spices, in its response to media queries over the past weeks, said it has given the coffee maker enough time to fall in line with the requirements of Section 19 of the Jamaica Agricultural Commodities Regulatory Authority Regulations 2018, which first required Salada to increase the local coffee content in its instant coffee formulation to 30 per cent in March 2019.

JACRA gave Salada a waiver to December 2019, but has recently returned to the issue with the September 1 mandate. The new move towards enforcement of the quota rule comes amid challenging times for the sector, which has been grappling with what’s to be done about the coffee beans that have built up in inventory and for which there is no market.

Salada has indicated that it is resistant to the change in quota for branding, commercial and financial reasons. It would lead to a change in the product’s formulation, and therefore the taste profile that loyal customers have come to expect, the processor has said.

In addition, Jamaica coffee is more expensive than imports, which would add to the company’s cost of doing business, Salada has said.

The Jamaica Mountain Peak brand reportedly holds over 50 per cent share of the instant coffee market.

karena.bennett@gleanerjm.com