Sugar Industry

Letter to Mr Velaphi Ratshefola MD CCBA

Mr. Velaphi Ratshefola 25 May 2018
Managing Director
Coca-Cola Beverage Company of South Africa
Dear Mr Ratshefola,

The FairPlay Movement is a not-for-profit trade movement that fights for jobs. Its goal is to end  predatory trade practices between countries so that big and small nations play by the same rules.

The FairPlay Movement believes that there is a constitutional imperative to its campaigns. South Africa has the first constitution in the world to include social and economic rights as justiciable rights. These rights include the right of access to housing, healthcare and education. They were included in recognition that what the majority of our people need and want is income to allow them and their families to enjoy sufficient food to eat, have a roof over their heads and have their children educated.

The importance of recognising the social and economic rights of South Africans was explained by the FairPlay Movement Patron, Justice Richard Goldstone at the 2017 FairPlay Social Support Summit in Johannesburg: “These second generation rights are as important to the majority of our people as those first generation human rights relating to freedom of expression, freedom of assembly, or freedom from unlawful arrest; and consequently and as a major innovation, the second generation rights are justiciable under our Constitution.

“By the same token the rights granted to all South Africans have little practical meaning for the millions of those in our nation who are unemployed and forced to live in circumstances that our Constitution does not countenance. Our unemployment rate is one of the highest in the world and it keeps growing.

The Southern African sugar industries have been severely impacted by the dumping practices of countries whose sugar producers enjoy subsidised input costs. As a consequence, the South African sugar industry has been contracting and shedding jobs for some years, primarily because of rising imports of cheap sugar.

We are distressed to learn that the Coca Cola Beverage Company of South Africa (CCBSA) has recently increased its imports of sugar, at the expense of South African suppliers, and plans further increases of imported sugar.

Please would you confirm or deny that this is the case and if so, how it accords with the public interest commitments agreed to by the Coca-Cola Beverage Africa (CCBA) merger parties in 2016. In particular, you are required in terms of clause 8.1 of the merger conditions to maintain, and where possible improve, the company’s level of local procurement of South African inputs. This specifically includes sugar, a key input for CCBSA. On the face of it you have transgressed the obligations  imposed by the Competition Tribunal and we would appreciate it if you would explain this apparent  non-compliance.

Furthermore, at your annual supplier development conference in March 2018, you committed to  diverting R3.9 billion in procurement spend to black-owned and black women-owned organisations  over the next three years. 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.

Many of the 15 000 jobs that have been lost in the South African sugar industry since 2013 have  been in family and black-owned small-scale farming operations as the number of sugar growers has  declined. These are mainly independent sugarcane growers who are a key component of the rural  economy.

The South African sugar industry is in decline, and facing thousands more job losses in the next few  years because of predatory commercial activities. It is puzzling that a major corporation such as  Coca-Cola would further imperil local employment by increasing sugar imports in apparent  contravention of specific commitments to the South African competition authorities.

The FairPlay Movement also invites your company to commit itself to supporting the constitutional  rights of all South Africans by eschewing all predatory trade practices that destroy jobs, motivated by  the effects of these practices on the rights of all South Africans, particularly poor, unemployed  people and small farmers.

Your urgent reply would be appreciated.

Francois Baird
FairPlay Movement
Copied to: Mr Ian Vos, General Counsel – CCBA

Response from CCBSA:
FairPlay 04 June 2018 Response