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Daley wants sugar subsidy reform
By Dave Carpenter, AP Business Writer
June 6, 2001
 
CHICAGO (AP) - The candy capital of the world is sour about high U.S. sugar prices.

Concerned that local candy manufacturers are cutting back and taking jobs abroad, Mayor Richard M. Daley showed up at North America's largest candy trade show Tuesday with some not-so-sweet words for Congress about the need for sugar subsidy reform.

Firing the latest salvo of a fast-intensifying lobbying campaign, he and executives of Chicago's candy industry said federal price supports are dealing a serious blow to businesses that are heavily dependent on sugar.

The Chicago area, which is home to Brach's Confections, Tootsie Roll Industries and Wm. Wrigley Jr. Co., accounts for roughly 15 percent of the country's candy work force. But those jobs are on the decline, falling to about 9,000 from 17,000 a decade ago, with Brach's recently announcing the loss of 1,100 local jobs.

While sugar growers dispute the reasons, the mayor largely blames a price-support program that has made American sugar twice as expensive as world prices.

``We need to remove these obstacles as soon as possible and allow our companies to compete on a level playing field,'' Daley said at the opening of the All Candy Expo, flanked by about 20 candy officials at the McCormick Place convention center.

The Chicago group urged the passage of legislation being introduced Wednesday by Rep. Dan Miller, R-Fla., that would phase out sugar price supports by the end of 2004, imposing import quotas on foreign sugar until then.

``They should be able to pass this,'' Daley said. ``This is a no-brainer.''

Opponents, who also are gearing up for a sugar showdown as part of Congress' review of farm laws, say Daley is misinformed.

The American Sugar Alliance contends that sugar accounts for only a small percentage of the cost of most candy products and that candy makers are fudging their facts.

The industry group, comprised of sugar growers, accuses the manufacturers of using the subsidies issue to deflect attention from the real reasons for their moves out of the United States: to find cheaper labor and lower environmental costs.

``Their effort to try to knock prices down further is an unabashed effort to improve their profits,'' said Jack Roney, director of economics and policy analysis for the growers' group.

Salvatore Ferrara II, president of Chicago-based Ferrara Pan Candy Co. and chairman of the National Confectioners Association, which sponsors the candy show, disputed that notion.

While his company has opened factories in Canada and Mexico, reducing its Chicago work force to 450 from 800, he said: ``It's not something we wanted to do. It's something we were forced to do. ... It's just not fair that our sugar prices are two to three times what our competitors pay.''

How consumers are affected depends who's talking.

The candy makers say the price supports cost taxpayers $495 million last year and added another $2 billion a year to the price they pay for sugar and sweetened foods.

The sugar growers say candy companies haven't passed their savings on to consumers even when the producer price for refined sugar fell 29 percent from 1996-2000. No sugar subsidies, they say, would doom troubled beet sugar factories and the many local economies where they are located.

``U.S. sugar policy is crucial to maintaining reliable supplies of sugar to food manufacturers'' and for keeping consumer prices ``reasonable, fair and competitive,'' the American Sugarbeet Growers Association wrote in a letter to Daley this week. ``Comparing U.S. sugar prices with foreign subsidized surplus sugar dumped on a distressed world market is not a legitimate comparison.''