Sugar Industry

Coca-Cola manufacturer taken to task over ‘sugar imports’

FairPlay has expressed concern about softdrinks manufacturer Coca-Cola Beverages SA (CCBSA) allegedly increasing sugar imports at the expense of South African suppliers.

In a letter addressed to CCBSA’s managing director, Velaphi Ratshefola, FairPlay founder, Francois Baird, said Ratshefola had reportedly “committed to diverting R3,9 billion in procurement spend to black owned and black women-owned organisations over the next three years” at the company’s annual supplier development conference in March.

“In the event that you are purchasing quantities of imported sugar, it would be important for you to explain how you reconcile the imported sugar with these commitments when local supply is available,” Baird wrote.

He added that “many of the 15000 jobs that have been lost in the sugar industry since 2013 have been in family and black owned, small-scale farming operations as the number of sugar growers has declined.”

Dr Muhammad Kadwa, manager of the SA Canegrowers’ Industrial Affairs division, told Farmer’s Weekly that South Africa had imported about 518000t of sugar between January and December 2017.

“This contributed to [South Africa’s sugar industry] exporting 40% of local sugar production and forced [the industry] to drop the notional price of sugar significantly over the past 12 months to be at import parity level,” Kadwa added.

In his response to Baird, Ratshefola said that, as part of the requirements of a Competition Tribunal-approved merger of various companies to form CCBSA in 2016, CCBSA had committed “to maintaining and, where possible, enhancing the procurement of various local inputs, including sugar.

“CCBSA has complied with its commitments to the competition authorities and other stakeholders, and remains committed to doing so,” he said.

“In so far as sugar is concerned, [CCBSA] has experienced significant, excessive and material increases in prices from a sector already the beneficiary of tariff protection, and the recently imposed so-called ‘sugar tax’ has presented challenges for the business and the industry.”

Ratshefola also wrote that CCBSA was currently engaging with the sugar sector, through the Department of Trade and Industry and the Economic Development Department, on these issues.

In a further letter, Baird accused Ratshefola of failing to answer the question of whether or not CCBSA was importing sugar, and whether CCBSA was purchasing sugar from Al Khaleej Sugar in the United Arab Emirates.

“It is as much in your interest as in [South African] workers’ and producers’ interests that these depressing suspicions are allayed by firm and true facts,” Baird said.

– Lloyd Phillips