Der Dickmacher

The thickmaker,” sugar. On 23 April 2013 the European and German Cartel Authorities carried out razzias at sugar processing plant company offices in four countries for suspected price fixing from 2004 to 2011. Sugar’s well-meant but interestingly unusual regulatory status in Europe has led to a lack of transparancy that apparently made it possible for pricing questions to arise. By law, 15% of European sugar must be imported from developing countries. European farmers who grow the roots from which the remaining 85% is processed are guaranteed a minimum price, but at strictly controlled quantities. Sugar beet farmers have to sell their product to the sugar-processing factories; very little sugar is traded on the open market. The six largest sugar processing companies control 80% of the European sugar market, writes the Süddeutsche. Two German sugar processors control 40% of the European market. The processing factories set the prices, which do not always track with world sugar prices. German consumers have been paying between EUR 0.60 and 1.00 per kilo (annual consumption averages ~36 kg/year/German). Sugar root farmers were getting 27 euros per ton until 2012 when, after a good harvest, the price jumped to 45 to 50 euros per ton.

Update on 18 Feb 2014: The German cartel authority [Bundeskartellamt] has fined Germany’s three largest sugar manufacturers ~280 million euros for collusion. The companies Pfeifer und Langen, Südzucker and Nordzucker were fined, as well as seven individuals. Südzucker had to pay nearly 200 million euros but Nordzucker’s cooperation substantially reduced that company’s fine.

(Dare   DICK maw caw.)

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