2205 final report.pdf - Agra CEAS Consulting

IMPACT OF THE EU SUGAR REGIME ON BCCCA MEMBER COMPANIES
import duty makes the sugar incorporated in the imported products more expensive than EU
sugar); and,
• EU exporters of sugar containing Non-Annex I products receive export refunds for the sugar
incorporated in those products.
However, the export refund system is criticised by the exporters of Non-Annex I products on two
grounds.
• Firstly, the sugar using industry has to buy sugar in the EU at the actual market price, which is
higher than the minimum guaranteed sugar price on which the calculation of the export refund is
based. This means that exporters of Non-Annex I products are disadvantaged in that they are
not compensated in full for the difference between the actual EU market prices and the minimum
guaranteed price in the EU.
• Secondly, the export refund is based on the weight of the sugar incorporated in the product and
the export refund for sugar as determined by the weekly tenders for export refunds. In fact the
lowest bid of the weekly tender for export refunds is taken, minus €30 per tonne. Exporters of
Non-Annex 1 products argue that this deduction of €30 per tonne is not justified by any cost
price consideration and thus puts the exporters at a disadvantage compared to non-EU
competitors.
If these criticisms of the export refund system are considered fair, this would imply that exporters of
Non-Annex I products cannot compete on an entirely ‘level playing field’ with non-EU manufacturers,
as far as the cost of sugar is concerned. This is particularly a disadvantage for the sugar using
industries in Member States, which like the UK, have relatively high industrial sugar prices vis-à-vis
other Member States (Section 3.1.2) and for products with a high sugar content, particularly
chocolates and sugar confectionery.
Results from the industry survey of those companies that export to third countries tend to
collaborate this. The majority of companies that have reduced extra-EU exports over the last five
years tend to rate the cost of sugar as more important than those companies that have increased
extra-EU exports (Figure 3.1). Furthermore, those companies that have been reducing extra-EU
exports over the last five years are generally those that produce BCCC products containing a
relatively high content of sugar, namely chocolates and sugar confectionery.
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