The South African sugar industry must find a way to diversify its product offering to stay sustainable and competitive.
If not, the industry will suffer the negative consequences of imported sugar and imported sugar products.
Wage negotiations in the sector have now reached a deadlock as unions and employers cannot agree on an increase percentage. Some sugar companies are issuing section 189 notices as they cannot afford their wage bill anymore, let alone increase wages.
Since the introduction of the sugar tax in 2017, the sugar industry has experienced difficult times. The tax, coupled with imported sugar supplies, has had some devastating effects.
At the same time, the beverage industry is moving away from sugar for health reasons due to customer expectations and to cut costs, as the sugar tax also impacts on the pricing of their products.
The industry already carries the burden of government trying to balance its books with increased taxes on fuel and other commodities. The introduction of the sugar tax increased the burden on the industry even further and could result in job losses.
This looming crisis was highlighted during the recent start of the annual wage negotiations, where unions’ demands were challenged with threats of staff reduction instead of increasing salaries, due to the increased taxes as well as the need to import sugar.
UASA agrees with both the Department of Trade and Industry (dti) and the South African Cane Growers’ Association (SACGA) that a long term solution must be found before the sector sheds more jobs. We therefore suggest an urgent meeting between the two parties to agree on a way forward that will protect the industry and its employees.
For further enquiries or to set up a personal interview, contact Stanford Mazhindu at 074 978 3415.