The two largest supermarket chains in Chile, Distribucion y Servicio (D&S) and Santa Isabel, a holding of the Disco/Ahold corporation, have been found to be selling sugar brands inferior to the grade advertised on the product's label, according to information from Chile's National Consumer Service (SERNAC). In addition, the two Santa Isabel brands do not specify the country of origin of the product.

This report comes as competition for domination of the supermarket sector intensifies between D&S, which owns the Ekono, Almac and Lider outlets, and Santa Isabel. The two supermarket chains hold market shares of 27.8% and 12.1% respectively.

SERNAC commissioned SGS Chile Limited to conduct laboratory tests on nine brands of Grade 2 sugar, including independent and supermarket brands. D&S's A Cuenta brand and Santa Isabel's Cinco Continenetes and Elmi brands were found to contain inferior grade sugar. The other brands analyzed, including the D&S brands Ekono and Lider, passed the tests.

The test results have been submitted to SERNAC's legal department, which could file charges against the companies. In addition, Santa Isabel could be prosecuted by the Metropolitan Environmental Health Service and the Public Health Institute for not displaying the country of origin on the product labels.

The different sugar brands were subjected to quality tests to determine the level of sweetness and measure impurities. Each sugar was classified according to international standards, the highest being Grade 1 and the lowest Grade 4. The A Cuenta and Cinco Continenetes brands, which were advertised as Grade 2, were found to be Grade 3, while Santa Isabel's Elmi brand, also advertised as Grade 2, was found to be Grade 4.

The report also compared prices between the products and found the D&S brand A Cuenta to be the second most economic at US$0.52 per kilo while Santa Isabel's Cinco Continentes brand and the Ekono brand were the most expensive at US$0.62 per kilo.

An executive from Santa Isabel said the company was not aware of the report, but would rectify any quality deficiency found by SERNAC. D&S representatives declined to comment.

By Steve Anderson