Guyanese manufacturers say Plantation white sugar unacceptable; reject call for 40% tax on refined sugar

Last Updated on Monday, 22 July 2019, 17:45 by Writer

The Guyana Manufacturing and Services Association Limited (GMSA) on Monday rejected calls by a Belizean producer of Plantation white, or mill white, sugar to impose a Caribbean-wide 40 percent tax on extra-regionally refined sugar, saying that Plantation white sugar will result in poor quality products and in some cases injury to consumers.

“If manufacturers were to use plantation white instead of refined sugar, for reasons of quality, products will no longer be as acceptable to consumers and will not be able to compete on the basis of quality with products coming into the region,” the GMSA said in a statement. “Further, manufacturers will face difficulty to export products out of the region to compete in extra-regional markets – exports that bring in valuable foreign exchange. Franchise owners, including CocaCola and PepsiCola, will not permit franchisees to use sugar not approved by them. In any case, if sugar of the required quality is not available for in the region, manufacturers will have to purchase extra-regionally if they want to continue to produce quality products.”

The state-owned Guyana Sugar Corporation (GuySuCo) has also decided to produce Plantation white sugar for local and overseas consumption as part of its diversification and value-added strategies to wean off solely cane sugar production for export.

The GMSA says it lauds and supports the efforts of the regional sugar industry as it seeks to improve its efficiency and make the sugar industry viable. It says it commits itself to using regionally manufactured products that meet requirements of quality and cost. At the same time, the GMSA says it refuses to offer products of quality lesser than it is accustomed to offer to its valued consumers and of lesser quality than is offered in extra-regional markets adding that it cannot be competitive and continue to do business if it were to do otherwise.

While stressing that it “fully supports local and regional products”, the GMSA made it clear that Plantation white sugar and white sugar are “not the same” because the “processes to produce them are substantially different and the end products are similarly different.”

The association said sulphur dioxide gas residues of up to 70 parts per million (ppm) are contained in Plantation white sugar as a result of the bleaching process. Concerns were also raised about the remnants of insoluble solids, conductivity ash, and unacceptable discolouration.

The solids cause defects such graining in sweets, and loss of the structure in ice-cream that could lead to the ice-cream not being ‘fluffy’ or adequately aerated as well as damage to expensive processing equipment due to its abrasiveness. “Conductivity Ash in sugar can cause foaming and loss in sensory quality in beverages and ‘bubbles’ with sharp edges in hard candy that can cause cuts in the mouth when eaten. From a safety perspective, sulphur dioxide at certain levels is known to cause hypersensitivity or allergenic reactions in some persons and must be declared as an allergen in many countries when the level reaches 10 PPM or above,” the GMSA added.

On the issue the common external tariff (CET) being levied on extra-regionally produced refined sugar, the GMSA said that would push up the cost of production, make regional manufacturers unable to compete with extra-regional products coming into the region and result in a loss of jobs.

“It will also mitigate against our competitiveness in extra-regional markets. Most regional manufacturers operate under small margins and loss of markets and increased cost will jeopardize the viability of these manufacturers. Many of these manufacturers that made many sacrifices and fought hard and long to survive will be forced to close their manufacturing lines,” the organisation said.

The Caribbean Forum group of nations like the Dominican Republic will not be subject to the CET on refined sugar as imposed by Caricom but can export sugar products to the region under concessionary terms. “They will therefore have a significant additional advantage over regional manufacturers other than those that they already have,” the GMSA added.

The GMSA said if refined sugar is manufactured in the Caribbean at a reasonable cost, regional manufacturers “will have no problem in purchasing same.”

According to the association, the expertise to set up refineries in the region is not lacking as the parent company of one regional producer, the Belize Sugar Industries Limited, American Sugar Refining, Inc, is one of the largest refiners of sugar worldwide. It manufactures refined sugar for many food and beverage manufacturers in the developed countries including in North America and Europe and also sells to developing countries, including Guyana through one of its subsidiaries, Tate and Lyle Corporation. The Association notes that Tate and Lyle Corporation had a previous (recent) association with GuySuCo.