Tough tariffs for US confectionery as America increases taxes on Canada

With events within global trade moving at an exceptionally fast pace amid tariff showdowns between the US and China, we round-up some of the key issues affecting confectionery. Keith Nuthall reports


The American confectionery sector is facing tough tariffs in its key export market of Canada, after the US government decided to impose punitive duties on Canadian exports of steel and aluminium.

Ottawa announced its own retaliatory duties, which were slated from July, having consulted on a shortlist of products, including potential 10% duties on US-made maple sugar and syrup, liquorice, toffee, chocolate, sugar confectionery, strawberry jam, nut purées and pastes.

The US move was also made against the European Union (EU), which has now moved ahead with its own planned retaliatory duties, including 25% duties on peanut butter – although earlier plans to penalise US whole cranberry exports appear to have been dropped.
Mexico, another victim of the metal tariffs, has imposed duties on US-made cranberries (20%), and apples (20%).

The EU Council of Ministers has approved new rules enabling EU-made beeswax to be labelled ‘organic’ when sold in all 28 member states. Within a comprehensive reform of the EU’s regulation on organic production and labelling of organic products, the new rules say that organic beeswax must be harvested from hives with sufficient reserves of honey and pollen for the bees to survive the winter.

In addition, bee colonies may only be fed with organic honey, sugar syrups, or sugar, where survival is endangered by severe weather, among other rules.
The General Court, of the European Court of Justice (ECJ), has rejected a bid by Bayer, Syngenta and BASF to overturn restrictions imposed by the European Commission on insecticides clothianidin, thiamethoxam and imidacloprid because they can harm bees.

The terms of reference of an EU Bee Partnership discussion group has been released by the European Food Safety Authority (EFSA). The group would represent consumers, the food industry, academia and non-governmental organisations researching and circulating information. This would include developing harmonised data on bee health, while strengthening collaboration among beekeepers, bee inspectors, food manufacturers and traders, farmers, veterinarians, scientists and others.

Trade agreement welcome

The European Association of Sugar Manufacturers (CEFS), the International Confederation of European Beet Growers (CIBE) and the European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT) have given a cautious welcome to a promise from the European Commission that a revised EU-Mexico trade agreement will preserve import duties on Mexican sugar exports.

Under a current draft, a 30,000 tonnes of sugar quota at EUR49/tonne duty would be phased in over three years, while most EU-Mexico trades would be duty free. The three bodes said the protection is need because of marketing arrangements, minimum prices,

CIBE has added its opposition to sugar industry concern about the European Commission’s April 27 decision to ban neonicotinoids, including in pelleted beet seed. A resolution adopted by CIBE’s 45th congress branded the decision as “a severe blow for the sustainability of the EU beet sector”, saying that such methods reduced the amount of pesticide used by the industry.

Meanwhile, CIBE has called on EU member states to work with the European sugar beet sector to ensure the new ‘income stabilisation tool’ that is part of the EU common agricultural policy’s (CAP) ‘omnibus regulation’ helps beet growers deal with current low and falling sugar prices.
The European Commission has proposed that legal authorisations under the EU Common Agricultural Policy (CAP) that helped administer the old sugar quota system be formally rescinded. The revised CAP will simplify EU farm subsidies – for instance reducing and then capping direct payments to farmers at €60,000 per farm, with some variable depending on labour costs.

European confectionery, chocolates and biscuits association Caobisco is supporting the UK-based ‘Be Treatwise’ initiative launched by Mondelēz International, Ferrero UK and Mars Wrigley Confectionery UK, to promote mindful eating and calorie consumption.

The German confectionery industry association, (the BDSI – Bundesverband der Deutschen Süßwarenindustrie) has claimed its members are in good financial health, with 35% of survey respondents saying they were doing better than last year (2017), and 50% reporting stable business. The only common problem was difficulties in recruiting skilled staff, which is “among the key challenges” for German confectionery manufacturers, said BDSI chairman Stephan Nießner.

The European Union’s (EU) food safety alert database RASFF has warned that Vietnam-made fruit jelly cups have been withdrawn from sale in the Czech Republic because they could suffocate consumers. They contained the unauthorised additive E425 konjac, whose presence was not declared in Czech on labelling.

Product recall

Meanwhile, RASFF reported that German-made nougat cream was recalled from sale domestically, Hungary and Switzerland, after metal fragments were discovered in a product.
Another RASFF-noted recent recall involved Bangladesh-made jellies sold in Britain because they included another unauthorised additive – in this case E407 carrageenan.
The American Bakers Association (ABA) has expressed dismay over the rejection by the US House of Representatives of an amendment to the 2018 USA Farm Bill, which would have limited subsides to US sugar production which inflate prices. An ABA note said it was “extremely disappointed that once again the House chose to put Big Sugar’s interests over jobs, growth, and American families…”

Western Growers, an association of nuts and soft fruit producers in Arizona, California, Colorado and New Mexico, USA, has welcomed a streamlining of the federal government’s H-2A temporary agricultural visa programme, saying it would give the industry greater flexibility to hire foreign workers for production.
The Indian government has approved a production subsidy of Indian Rupees INR55 (USD0.81 cents)/tonne to help sugar mills pay tax debts. The Indian Sugar Mills Association estimates that the subsidy could reach INR15 billion ($222 million) in total.

Ghana’s Licenced Cocoa Buyers Association has been fighting a legal battle at the Ghanaian High Court to prevent the country’s news television channel Joy News from airing an investigative documentary alleging large-scale thefts of cocoa involving produce clerks adjusting weighing. The association denies the claims.
Concerns that Sudanese authorities are manipulating sugar subsidies in favour of privileged traders have helped sparked violent demonstrations by West Kordofanis in Abu Zabad, in Sudan’s West Dafur state.

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