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Customs tackles manufacturers who leak sugar into the retail trade

Published:Tuesday | April 28, 2015 | 4:00 AMEdmond Campbell
Refined sugar.

As major players in the manufacturing sector strongly oppose the Government's plans to impose a cess on imported refined sugar, head of Jamaica Customs, Major Richard Reese, has disclosed that his agency has clamped down on manufacturers who have leaked this product into the retail market.

At the same time, Reese said the ministries of finance and agriculture are reviewing recommendations his agency has submitted on options other than a cess on imported sugar.

He also told The Gleaner yesterday that a major local supermarket chain, which has allegedly been found with uncustomed refined sugar, has taken Jamaica Customs to court challenging the seizure of the product.

He said the supermarket has claimed that it purchased the product from a third party.

"Under our law, if we see you with a product and you say you have bought it from another entity and we check that entity and it did not pay duty on it, under the act we can forfeit it and fine you for uncustomed goods," Reese said.

No JMA members implicated

According to the Jamaica Customs boss, his agency moved against manufacturers late last year, adding that none of the entities implicated in the illegal act are members of the Jamaica Manufacturers' Association (JMA) or large manufacturers.

Last week, Agriculture Minister Derrick Kellier charged that manufacturers were leaking imported refined sugar into the retail trade. He then announced that the Government would be imposing a cess on imported refined sugar.

Companies who are involved in manufacturing receive an incentive whereby they are not required to pay duty on the sugar because it is used as an input in the manufacturing of their products.

"You had a few manufacturers who were not using the sugar in their process and were substituting it with artificial sweeteners, and then selling that sugar into the retail trade. The persons who we caught doing it were not members of the JMA or large manufacturers, so ... we also led operations to seize sugar in retail outlets," the Jamaica Customs boss pointed out.

He said sugar seized by his agency had been donated to a number of institutions in need.

Since Jamaica Customs took action against manufacturers and players in the retail trade who have been found with uncustomed goods, the agency has been monitoring these outlets for a number of items such as sugar and pork products.

Reese said the Sugar Industry Authority, which has a monitoring role in terms of the importation of granulated sugar for the retail trade, has indicated that the actions of Jamaica Customs in stemming the illegal practice of some manufacturers have borne fruit in compliance.

"We have adopted a more aggressive posture in our field operations, working with commodity boards and the private sector to ensure that there are no unfair practices in the market," Reese stressed.

And, with the introduction of ASYCUDA World - the new integrated customs system - Jamaica Customs can now better monitor the import of artificial sweeteners and sugar in the market.

"We can look at who imports artificial sweeteners, the quantities, who they supply it to, who imports sugar, etc.," Reese added.

Meanwhile, chairman of Caribbean Producers Jamaica Limited, Mark Hart, has said the imposition of a fine would render products produced by his company uncompetitive when compared with Trinidadian manufacturers.

He said the sector was already facing high utility costs, and noted that a tax would be a disincentive.

"Anything that increases the cost of locally produced products is definitely a backward step and so we oppose it strongly," he said.

He said the cess could have the effect of forcing his company to reduce its manufacturing facilities and ultimately lead to loss of jobs.

edmond.campbell@gleanerjm.com