NSW cane growers battling aggressive cost-cutting by foreign-owned millers have sent a loud message to consumers and the government claiming the scene is set for overseas sugar, at hiked-up prices, to be the only option on our supermarket shelves in the future.
The NSW Sugar Milling Co-operative, at the first senate inquiry hearing into sugar marketing held at Murwillumbah last week, said consumers buying the iconic CSR brand were likely getting sugar either produced overseas or made from raw sugar imported from Brazil.
Coca-Cola sold in Australia was also now likely based on Brazilian sugar, the inquiry heard.
Singapore-based farm commodity giant Wilmar, which entered the sugar game in 2010 through the acquisition of Queensland operations including Sugrogen (CSR), last year secured the five-year, 120,000-tonne-per-annum sugar contract with Coca-Cola Amatil (CCA), which had long been the business of the NSW refinery, Manildra Harwood Sugars near Grafton.
The NSW Sugar Milling Co-operative, owned by more than 500 growers, employing 2200 and part-owners of the only Australian-owned sugar refining business left, told the hearing Wilmar was importing sugar at discounted prices in an attempt to push out the refining companies that service Australia's domestic market.
Sugar was currently being offered to Australian clients at the cost of production, NSW sugar chief executive officer Chris Connors said this week.
NSW Sugar's submission to the inquiry said Wilmar offered significant upfront deposits to secure sales to Australian sugar buyers and locked in contracts for extended periods.
Smaller players like NSW Sugar do not have the capacity to undertake an upfront payment system.
The submission also pointed to evidence in the domestic market Wilmar was selling into spot prices, which are lower to attain a larger market share, effectively taking away the opportunity for Australian producers to tap into the more attractive future prices.
Further, NSW Sugar is concerned its ability to export will be restricted, given a Wilmar Gavilon partnership purchased the Brisbane Sugar Terminal in 2009, placing the company in control of an essential piece of infrastructure.
NSW Sugar's submission revealed Wilmar had made an offer to purchase all its raw produce, implying the closure of the Clarence River refinery.
"Wilmar have said directly to us that there is too much refining capacity in Australia," the submission said.
"We respectfully declined their offer."
Nationals Senator John Williams, a member of the Senate committee, wants CCA to be called to the inquiry, saying the laws to compel the soft drink giant to comply exist.
He has put the request to the Rural and Regional Affairs and Transport References Committee, with a decision expected at the end of this week.
"We need to ask Coca-Cola why they've had to leave an Australian supplier," Mr Williams said.
"Then the inquiry needs to look closely at Australia's anti-dumping laws and determine whether they apply in this situation."
The inquiry, due to report its findings by May, heard from numerous parties at the Murwillumbah hearing, including growers and millers, the Tweed Heads Chamber of Commerce and the Tweed Shire Council.
Two more hearings were held last week in Queensland, where Wilmar also came under attack, accused of interfering in free trade agreement talks between Australia and Singapore.
Mr Williams said it was clear from the hearing the survival of NSW cane farms were under threat.
"One of the big concerns in NSW is that these farms are on floodplain country and mostly small scale.
"The options for that land are limited if the sugar industry fails."
Supply smacks local mills
NSW Sugar Milling Co-operative boss Chris Connors said it was amazing refining operations constructed to process Australian raw sugar were being serviced by overseas supply.
"Our forefathers would be rolling into their graves," he said after the first public hearing of the Senate inquiry into sugar marketing, held in Murwillumbah last week.
"A lot of this sugar is coming from companies that have subsidies or protection in place for their own sugar - it makes a mockery of free trade agreements being spruiked."
Mr Connors (pictured) said the federal government needed to act to ensure Australian grower-owned businesses were not destroyed.
"The impacts of major foreign owners in the Australian sugar industry has left growers, and some millers and refiners, exposed to unfair practices," he said.
"There is little real protection under the Commonwealth Competition and Consumer Laws.
"Certainly there is no protection for the growers."
Shan Goodwin
Journalist for The Land on the North Coast.
Journalist for The Land on the North Coast.
