The Lanka Confectionery Manufacturers Association (LCMA) has expressed concern that the recent hike in the import of confectionery fats (up sharply to 160 per cent from 60 per cent) has adversely affected the industry and those working in it. The increase in confectionery fats will significantly impact the cost of manufacturing of confectionery products like [...]

The Sunday Times Sri Lanka

‘Sweets’ industry in crisis over import duty hike

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The Lanka Confectionery Manufacturers Association (LCMA) has expressed concern that the recent hike in the import of confectionery fats (up sharply to 160 per cent from 60 per cent) has adversely affected the industry and those working in it.
The increase in confectionery fats will significantly impact the cost of manufacturing of confectionery products like chocolates, biscuits, cakes, ice cream, etc. “This is in the backdrop that already the import levies of some key raw materials used in the manufacture of confectionery are highest in the region e.g. whey powder 140 per cent of CIF and sugar 55 per cent of CIF to name a few,” the association said.

It said the industry contributes significantly to the national economy in terms of GNP contribution, foreign exchange earnings, direct and indirect employment generation, its products are on par with the best in the world and member companies export to over 55 countries all around the world
“Due to this significant increase (in duty) it is not viable to manufacture fast moving smaller pack sizes which account for nearly 40 per cent of the business. This will compel us to increase the prices and then the cheap and inferior imports will flood the market, draining the hard earned foreign exchange and risking the lives of our future generation,” LCMA said.
The release outlined the
following issues:

1.The serious threat to workers in the confectionery industry (our member companies have given over 50,000 direct and over 500,000 indirect employment)

2.Possibility of deterioration of quality standards of confectionery items available in Sri Lanka (because of low industry profitability)

3.Price escalation by major players for survival causing substantial low cost imported confectionery products flooding the local market (already this is an issue)

4.Viability of exporting confectionery products manufactured in Sri Lanka is at stake.

5.Due to low industry profitability, Sri Lanka will have a negative advantage to capitalise in growth of global confectionery supply chain.

6.Sri Lankan consumers may be deprived of buying a quality product at an affordable price due to possible price escalations and malpractices.
It said increasing import levies of critical ingredients which are not manufactured in Sri Lanka will only prevent or delay in achieving the vision of being a prosperous nation by 2023, 75 years after gaining independence (as envisaged by Prime Minister Ranil Wickremesinghe).

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