The EU’s plan for reform of the sugar sector would put Europe’s cereal starch sweetener industry at risk, threatening job losses and even possible business closures, according to the European starch industry body Association des Amidonneries de Céréales (AAC).
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“The Commission’s proposed reforms would have extremely serious consequences for our businesses, employees and suppliers,” said AAC managing director Lorenza Squarci. “The Commission declare that they want to build sustainable beet agriculture in a competitive way but seem to totally overlook the competitive position and livelihood of the rest of the sweetener industry, notably the fact that the EU has a competitive cereal starch sweetener industry revolving around isoglucose.”
“While the AAC clearly recognizes the need for significant reform for the sugar sector, we also require equitable treatment during this transition arrangement,” she said. “The danger is that the proposal overlooks the non-beet element of a truly competitive industry in Europe. In protecting one part of the industry they threaten the viability of the other.”
The Commission has proposed a major reduction – a two-year, two-step cut of 39 % – in the white sugar price. Set against this, AAC members say, the small proposed increase in the isoglucose quotas would undermine the Commission’s own stated aims to increase competition and to diversify the range of sweetening products on offer.
“EU isoglucose production is subject to a quota which restricts sales to around 3% of the total EU sugar market,” she said. “The only way for us to remain competitive after the reform – and offer customers real choice between sweeteners – is for the Commission to substantially increase isoglucose production and abolish our quotas. The current proposal gets nowhere near: it would only increase the quota by a relatively small amount.”
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By GlobalDataThe economics of cereal starch sweeteners have always been closely linked with those of sugar. The cereal starch industry has almost 40 manufacturing sites across Europe. Between them, they produce five million tonnes of natural sweetening products per year – accounting for 70% of their overall total production – including isoglucose. All these natural products are produced from over 13m tonnes of European cereals representing a total agricultural area of around 2m hectares, the same as the area used to grow sugar beet.
“It is essential that we have an immediate significant increase of isoglucose production in order to build up the economies of scale necessary to compete at lower sugar price,” Squarci said. “We also need to recognise the fact that the cost of the cereals which are our raw materials, will not decrease while sugar beet prices will decrease, further penalising our industry. Our long-term survival is threatened by this double blow.”
Annual research and development investments by the industry total €100m (US$121m) per year including fundamental research into renewable alternatives to petrochemicals products. This work would also be threatened by the proposed sugar reform.
“It is vital that the member states understand the major impact of the sugar reform on the whole cereal starch sector and make certain these concerns are taken into account in the final reform proposal,” she said.
