Wrigley and Hershey record sales growth

Published online: Jul 26, 2006 American Sugar Alliance
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In February of this year, Bill Wrigley Jr. bragged to shareholders about Wm. Wrigley Jr. Company's enormous profits in 2005. "The $4-billion mark in sales is another significant milestone for the company," he beamed. "Our talented global team produced our ninth consecutive year of record earnings." Not to be outdone, the Nestlé Group promised its shareholders a higher dividend because of record profits and sales in 2005. And for Nestlé's shareholders, the news got even better. "For 2006, I expect organic growth of between five and six percent," said the company's chairman and CEO. Next up: The Hershey Company, whose CEO exclaimed, "We delivered record sales growth.and achieved record profitability and returns from operations." Indeed, it was a sweet year for candy companies. In fact, it's been a sweet decade for manufacturers of sugar containing products. According to the U.S. Dept. of Commerce, domestic production of sweet products grew by a staggering 10.5 percent between 1997 and 2002. Production of non-sweetened foods, by contrast, only grew at a 5.2 percent clip. Times haven't been so rosy for the men and women who produce the sugar on which these food manufacturers depend. Since 1996, 33 sugar mills and refineries have closed their doors because of low sugar prices. Following the hurricanes of 2005, prices rebounded somewhat, but a sugar factory is unlikely to reopen once it closes. "Unfortunately, these closings cost thousands of hard-working Americans their jobs," said Jessie Breaux, a sugar farmer from Franklin, Louisiana. "This not only hurt employees, but it crippled rural communities that depended on these factories for work." Breaux pointed out that consumers saw none of the benefits of lower sugar prices because food manufacturers pocketed the savings to boost profits and stock value. "Even though sugar farmers made less, grocery shoppers actually paid more as the cost of cereal, candy, cookies, ice cream, and bakery goods steadily climbed," he added. "In other words, we got poorer, Soccer Moms forked over more of the family food budget, and large food manufacturers boosted revenues on both our backs." Based on the results from the first quarter of the year, the good times are expected to continue for these industrial sugar users. That's why Breaux and America's sugar producers are so saddened by the companies' aggressive lobbying on Capitol Hill to drive down sugar farmers' prices and gut the sugar policy on which producers rely. "If America's no-cost sugar policy were eliminated, I'm afraid widespread bankruptcies in the sugar industry would be a foregone conclusion," Breaux explained. "Wrecking rural communities in sugar country seems like a steep price to pay so a handful of rich companies can get a little richer." www.sugaralliance.org