Confectionery industry cries for balanced sweetener!

By Charumini de Silva

The Lanka Confectionery Manufacturers Association (LCMA) says that it is neither looking at protectionism nor free trade but fair trade.

With the Government re-examining the Comprehensive Economic Partnership Agreement (CEPA) with India and Free Trade Agreements (FTAs) with Pakistan and China, LCMA last week urged the Government to first implement necessary measures to safeguard locally-manufactured goods by passing the anti-dumping countervailing bills.

Speaking to the media following the association’s Annual General Meeting recently, LCMA Patron Ramya Wickramasinha said that the LCMA had no objection to the Government entering into these trade agreements but emphasised the fact that the authorities should first create a level playing field.

“There shouldn’t be preferential treatment for locally-manufactured products and imported products,” he added.

Further clarifying his point, Wickramasinha said that imported products were permitted to carry stickers to comply with labelling regulations. However, it is not allowed for the locally-manufactured products. 

“Today there are specialised confectionery shops in the city selling imported confectionery. Not only do they not conform to the labelling regulations but they have used banned ingredients risking the lives of the consumers,” he said.

The LCMA cautioned that these outlets were gradually increasing in number and urged authorities to take stern action as the confectionery industry was one industry where Sri Lankan companies dominated the local market through quality and value for money.

Similarly, Indian products were advertised on satellites and cable TV channels that were not taxed. Many of these are in respect of international brands, which unfairly compete with Sri Lankan brands. Sadly, the Government makes no charge on this whatsoever ever, the LCMA said.

“We request that the Government charge a tax of Rs. 25,000 per minute or on a pro rata basis or alternatively these advertisements should be taken out and blanked,” the LCMA said.

Raising another concern, Wickramasinha highlighted that backward integration of supermarkets in the marketplace had caused the local confectionery industry another challenge by not treating their competitor products in a fair manner. 

“They do this by not giving shelf space according to the movement of products, demanding unreasonable margins and damaging packs and products.”

He said that supermarkets were not allowed to integrate backwards and had their own manufacturing plants in other countries. Thereby, the association proposes that the Government should take notice of this and address it accordingly.

Highlighting the potential of the confectionery industry, LCMA Chairperson Shanaz Hakeem said the industry had been earning valuable foreign exchange for the country and said that with proper support it could be elevated to the level of the tea and garment industries.

“To reach the next level it is imperative for the local industry to be strengthened and increase its exports. Thus, we suggest to change the import levies based on MRP (as opposed to CIF price at present) as some countries like India do. Thereby the Government will be able to earn much-needed revenue,” LCMA said.

Elaborating on brand-building, Wickramasinha said that the Export Development Board (EDB) was in a position to build a brand for Sri Lanka Confectionery and pointed that they could implement it with the funds collected in the form of cess from ingredients of their raw materials and packaging materials.

For many years cess has been charged for imported raw materials which are not manufactured in Sri Lanka. 

“The confectionery industry is growing at a healthy pace. The total export value of the industry is over $ 35 million per annum and it is growing,” he added.

“The per capita consumption of confectionery (biscuits and related products) is over 4 kg at present and as industrialists we see great potential in the future,” Wickramasinha noted.

LCMA member companies export to over 55 countries around the world. Furthermore, the companies provide over 50,000 direct and 500,000 indirect employment opportunities.

Pix by Lasantha Kumara