Candy prices rise while sugar prices stay flat, producers say

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.



STOWE, Vermont, Aug. 6, 2014 - Consumers are paying more for their favorite candy bars despite the fact that sugar prices have remained relatively flat over the past 30 years, according to a report released today by the American Sugar Alliance (ASA) , a sugar producers group, at the 31st International Sweetener Symposium in Stowe, Vermont.

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“A Hershey bar cost about 35 cents in 1983, and the biggest ingredient in that bar - sugar -- made up about 2 cents worth of its cost,” according to the group's annual Sugar Price Survey. “By 2013, the cost of that same Hershey bar had risen to $1.39, and sugar still just constituted about 2 cents worth of its cost.”

Sugar accounted for roughly 4 percent of a candy bar's cost in the ‘80s but today that percentage has fallen to 1 percent, ASA noted. And that percentage could drop further as major manufacturers, Hershey Co. and Mars Chocolate, announced price hikes in July.

“With a setup like this - steady price increases for its products and low, stagnant prices for its biggest ingredient - it is not surprising that confectioners are outpacing other food makers in the profit department,” read the report.

The sugar producers are locked in a battle with the Sweetener Users Association (SUA), representing the major candy makers among others, over government sugar policy which it says artificially supports higher sugar prices by, among other things, using quotas to limit supply from overseas. Randy Green, a consultant to SUA, made that argument this week during a panel discussion at the symposium.

ASA also questioned large candy companies' claims that sugar policy is hurting its profit margins, which ASA says are higher than even major oil companies.

 “But Congress has rebuffed Big Candy's lobbying efforts on every occasion because U.S. sugar policy works,” the report concluded. “Confectioners are very profitable and efficient U.S. farmers have a fighting chance to survive amid a sea of foreign sugar subsidies.”

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