The German confectionery industry is calling for politicians to “urgently” reform the “strongly” regulated European sugar market, in a bid to avoid further damage to companies trading in the sector.

Speaking at this year’s ISM confectionery exhibition in Cologne, Bastian Fassin, executive committee member of the Association of the German Confectionery Industry (BDSI), said it is advocating the “rapid” lifting of the European sugar quota and a lowering the EU’s “extremely high” protective tariffs.

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“Shortages in supply of sugar from Europe, a market protected by tariffs, and increases in raw material prices in the EU sugar market, contributed to company closures and takeovers in the confectionery industry in 2012. The high price of sugar has cost jobs in the confectionery industry,” Fassin said.

According to BDSI, the German confectionery industry was unable to take advantage of growth opportunities in 2012, particularly in terms of exports, as a result of the tariffs. Companies were also forced to pay more for the sugar they used at home.

“Substantial increases in prices for raw materials and energy as well as stiff competition among food retailers negatively affected the results of the some 220 industrial manufacturers of German-made confectionery and snack items in 2012,” Fassin said. “Companies found themselves squeezed between, what were in many cases, only a few raw material suppliers – particularly from the sugar industry – and the highly consolidated food retail sector.”

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He added that confectionery manufacturers had to bear “most of the burden of higher raw material costs” because it is “often difficult to pass on price increases to food retailers”.

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The BDSI said it estimates that around 220 industrial manufacturers of confectionery and snack items in Germany had to accept a decline in production volume of 0.5% in 2012 to around 3.79m tonnes. Production turnover sank by around 0.3% to around EUR12.47bn, it revealed. Germany’s export business also sank last year, by 4%, for the first time since 2005. Export turnover stagnated at around ERU5.8m in 2012.

“We are calling for politicians to urgently reform the strongly regulated sugar market, so that further damage to medium-sized companies is avoided. To this end, BDSI is advocating the rapid lifting of the sugar quota and a lowering of the EU’s extremely high protective tariffs,” Fassin said.