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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2830

Authorties sitting ducks, while the confectionery industry collapses

By Quintus Perera – Asian Tribune

Colombo, 09 November, ( Due to some state agencies ignoring the complaints and grievances of the Lanka Confectionery Manufacturers Association (LCMA) the industry is faced with dire consequences even to the extent of laying off hands involved in the confectionery manufacture, as several large and small factories were closed down. For these consequences LCMA has blamed some of the state agencies for applying double standards – stricter one for them and a more lenient one for the importers of finished items.

LCMA points out that if these cheap imports are continued unchecked no sooner, the entire industry in the country would collapse. They said that the pertinent authorities are showing a lukewarm attitude towards these importers where these importers appear to be flouting the labeling regulations and there is no mention of the ingredients used on these imported products that are priced very low to lure the unsuspecting consumer.

LCMA pointed out that due to this lackadaisical attitude of some of the state agencies on the one hand the state coffers lose a huge chunk of revenue, on the other while jeopardizing the once lucrative confectionery industry. Further, due to not ensuring the exact ingredients in these imported products, the health of the consumers, specially small children are in danger. The attitude of these government agencies also likely to endanger 10,000 direct employment and around 200,000 indirect employment.

They point out that a lot of sub-standard products without proper labeling are imported and sold in the local market and the fact that these products are sold at cheap prices would suggest that they are manufactured with inferior ingredients would be harmful for human consumption.

Most of these products are imported at below cost of locally manufactured product prices.

Raw materials imported by the local confectionery manufacturers are subjected to stringent checks for health hazards, but LCMA says that the imported items do not go through these health tests, whereas in India, they point out that every single item some LCMA members export to that country are severely examined to conform to Indian Standards and for regulatory and tax purposes.

They point out that confectionery items with close expiry dates are imported due to non-recommendation of effective regulations to the Ministry of Health by the Food Advisory Committee and it was found that imported products in the local market with their original expiry date and even the manufactured date covered with stickers with new expiry and manufactured dates flouting regulations liable for punishment, yet they are continued unchecked.

LCMA indicated that it has been sheer apathy of the attitude of some of the state agencies involved as the struggle to get the machinery to regulate the imports have been carried on since more than 10 years, but to no avail.

With regard to bringing imported sugar confectionery and chocolate products under Compulsory Import Inspection Scheme, LCMA proposed a similar system adopted by India. An amendment to the Food Act in these lines was approved by the Food Advisory Committee as far back as 1992. However, apparently this has still not been placed before the Minister of Health and Nutrition for approval.

They indicated that a study made by them on the imports of sugar confectionery classified under HS Code 170490 from January to May 2007, they have found that the CIF prices of some are absurdly low, as low as Rs 30.08 per kilo. There were 30 importers out of a total of 56 importers who had imported at CIF prices of less than Rs 75 per kilo.

Using the same average imports were made from countries like, China, Hong Kong, Pakistan, Thailand and Malaysia, the CIF prices per kilo ranged as low as Rs 27.10 to a maximum of Rs 48.05. Local manufacturers cost of ingredients and finished products imported cost range has been from Rs 110.28 up to Rs 159.48 per kilo without tax and with tax ranged from 118.70 to Rs 176.21 per kilo.

The above attitude proves the indifferent taxation and different import policy applied to local manufacturers and the direct importers.

To save the industry from total collapse, LCMA requests the authorities to adopt stringent procedures on labeling, check the imports on health risks viz checks similar to that of imports of local manufacturers and a tax imposition at a minimum rate on par with the cost of local manufacturers so that imported products cannot be sold at low prices.

They have made innumerable appeals to all the concerned state agencies such as Secretary to the Finance Ministry, Chairman, Trade and Tariff Cluster, Director General of Customs, Director of Customs, Policy Planning and Research, Director, Ministry of Industrial Development, Ministry of Enterprise Development, Chairman, Food Advisory Committee, Secretary, Ministry of Health and Nutrition, Chairman, Sri Lanka Standard Institute and Chairman, Consumer Affairs Authority.

As there has no tangible response by the above agencies, now the LCMA has requested President Mahinda Rajapaksa to intervene and save the confectionery manufacture from total collapse.

- Asian Tribune -

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