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'Hysteria' fueling manufacturers' response to sugar cess - Rickards

Published:Friday | May 1, 2015 | 5:00 AM
Rickards: The cess is not a major problem. This is one that is attended by simple, pure and applied hysteria.

Chairman of the All-Island Jamaica Cane Farmers' Association (AIJCFA) Allan Richards says the newly announced cess on refined sugar is not a major problem to manufacturers, given that no entity has put forward any calculations of the expected impact on their operating expenses.

Rickards yesterday further dismissed the outcry of the manufacturers, and by extension the Jamaica Manufacturers' Association (JMA), as mere hysteria.

"I ask myself why is it in all of these arguments, you don't hear specifics about what it will mean in terms of an increased cost," Rickards said during a meeting held yesterday at the offices of AIJCFA in Kingston.

Tax all sugar imports

Additionally, the AIJCFA head suggested that cess should be added to all products with sugar content entering the country.

"Put a cess on it all... because that would not only supply the financial source that is desired but it would also offer a degree of protection to the local drinks industry," he charged.

He said the all-out cess would mean the manufacturers "would not be placed at a perceived disadvantage because a raw material is coming in which attracts a small cess," but would be protected with the cess on all sugar-laced products.

Rickards further pointed to the volatility of world market prices for refined sugar, noting that despite the current reduced price of US$404 per tonne, the prices could again rebound to the recent high of US$469 per tonne.

"What are they going to say if it goes back up by, say US$35? Are they going to say they can no longer operate?" the AIJCFA head stressed.

He said the sugar cane industry has been struggling for years, with successive ministers of agriculture failing to enact measures to protect the sector. He congratulated Kellier for his "testicular fortitude" in finally addressing the issue.

Manufacturers have been up in arms since the announcement of the proposed cess to be imposed on refined sugar imported for input for their goods.

Chairman of the Lasco Affiliated Companies Lascelles Chin has threatened to shift additional phases of his company's expansion to Trinidad amid what he described as an already stressfull financial landscape in which businesses operate.

Plug loopholes

But for Rickards, the impending cess will plug the loopholes that saw leakage of the commodity into the retail trade and which robbed government coffers of well-needed revenue.

He said the minister's announcement simply translates to having all imports of sugar returning to the purview of the Sugar Industry Authority (SIA).

Stressing that the leakage was counterproductive to the overall growth of the sugar sector, Rickards said "it is callous and unscrupulous and it is an occurrence that I have heard no one seek to address until the minister contemplated this move", even as he shunned the suggestions put forward by the manufacturers to identify and shame the culprits.

"The cess is not a major problem. This is one that is attended by simple, pure and applied hysteria," he said.