More on the Counterproductive Nature of Sugar Tariffs

Back in February I mentioned that high tariffs on sugar had caused Kraft to announce that it would close the LifeSavers plant nearby and move it to Canada. The Christian Science Monitor has an article that points out this is an industry wide phenomenon in the hard candy industry.

According to the Monitor, high sugar prices are driving many hard candy manufacturers out of the United States. Brach’s Confections, which employs 1,100 people in the Chicago area, has announced that it will close down that factory by 2004. It will contract that work to Mexico or Argentina.

A George candy maker, Bobs Candies Inc., has moved its 40 percent of its candy cane operations to Mexico to avoid the high tariffs on sugar. Hershey Foods Corp. is closing its Colorado factory that produces the excellent Jolly Rancher hard candies, but will not say yet where production will be relocated.

Greg McCormack, president of Bobs Candies, tells the Monitor,

I don’t know whether there will be a domestic hard-candy industry in 10 years’ time. . . . You’re going to see tens of thousands of jobs leave this country — jobs that paid $10 to 20 an hour.

Unions and others say that it is the labor costs — not the high price of sugar — that is driving candy manufacturers across the border, but the reality is there are enormous savings to be had by avoiding the tariff. McCormack, for example, expects that his company will save $2 million annually just from cheaper sugar costs.


Bitter reality: Candy less likely to be ‘Made in US’. Laurent Belsie, The Christian Science Monitor, April 8, 2002.

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