The corn sweetener in your soda makes sugar refiners bitter
Bite into a hot dog swathed in ketchup, savor a jelly-smeared sandwich, or take a swig of your favorite soft drink. The sweetness you taste once came from cane or beet sugar. Now corn is the sweetener source. But therein lies a bitter tale for sugar refinery workers.Skip to next paragraph
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About 400 workers at the Revere Sugar Corporation's refinery in nearby Charlestown will be looking for new jobs soon. Another 100 workers in Revere's Chicago plant face the same fate.
A couple of Philadelphia refiners closed shop within the last two years. And industry analysts say several more plants in Louisiana are in trouble.
One after another, companies that make ice cream, soft drinks, and processed foods are switching from cane and sugarbeet sucrose to less expensive high-fructose corn syrup.
''Fructose has taken the all but 15 percent of the soft-drink industry from us,'' says Nicholas Kominus, president of the United States Cane Sugar Refiners' Association.
''Coke (Coca-Cola) said it would never go to high-fructose. A few years ago, they went to a mix of 50 percent. Pepsi held out but finally they switched, too, '' says Mr. Kominus.
Last month, Coca-Cola Co. told bottlers they could up their sweetener blend to 75 percent fructose.
That was the final blow for Revere, a Coca-Cola sucrose supplier.
Refiners claim sugar shouldn't be more expensive than fructose. In fact, they say, sugar costs consumers three times as much as it should. On the world market , raw sugar now costs about 7 cents a pound. The market price in the United States is 22 cents a pound.
''Over the last five years, industrywide, some 40 percent of our business has gone to fructose producers because the price of sugar has been kept artificially high,'' says Peter Hardy, vice-president of Refined Sugars Inc., in Yonkers, N.Y. Federal price supports for sugar cane and beet growers have held prices up and created an umbrella for fructose suppliers to sell under.
Currently, there is a glut of sugar on the world market and a shortage of sugar in the United States. Early freezes in Texas and Florida have reduced the domestic crop this year. Import quotas, enacted by the Reagan administration in 1982, keep the prices high by limiting foreign supplies.
Last Thursday, the Department of Agriculture relaxed import quotas enough to allow an extra 100,000 tons of sugar into the US this year. Before the quotas, 5 .1 million tons were imported in 1981; the following year, only 3 million were imported.
The most recent move is ''strictly symbolic,'' says Tom Oxnard, a sugar trader with Paine, Webber, Jackson & Curtis Inc. in New York.
''Much too little, too late,'' concurs Revere president George F. Mulford.
The easing of the quota will prevent a shortage this summer, says Mr. Oxnard. ''But the important aspect of this decision is that refiners are showing some muscle for the first time,'' he says. ''It's spring training time for them. Next year will be the regular season.''
Indeed, when the farm bill comes up before Congress next year, refiners and confectioners hope to knock import quotas out of the park. ''No other farm group has this kind of protection,'' says Mr. Kominus at the US Cane Sugar Refiners' Association.
But cane and beet growers say they need the protection. ''Since 1974, we've lost 14 of 56 plants,'' says Van Olsen of the US Beet Sugar Association. ''Everybody is taking their lumps except fructose makers.''
''Beet sugarmakers haven't lost a plant since this quota system went into effect,'' counters Mr. Kominus. ''Their only problem is over who gets the spoils - the growers or the processors.''
The price supports and quotas came about in 1981 when Ronald Reagan, who originally opposed them, exchanged his support for congressional votes on his tax and budget plans.
Refiners are not alone in their bid to oust the quotas. The State Department has difficulty winning the argument for freer trade when debt-ridden sugar-producing countries, such as Brazil, Argentina, Honduras, and the Philippines are being locked out of the US market.
When the sugar showdown comes, there is one more powerful lobby with a sizable vested interest in the outcome - corn farmers. Fructose refineries are the third-largest users of corn.