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Sugar millers seek reform of industry Code of Conduct

The Australian sugar milling sector will contribute positively to the review of the Sugar Code of Conduct, announced on 4 July 2018 by Minister for Agriculture and Water Resources, the Hon. David Littleproud MP.

The Review of the federal Competition and Consumer (Industry Code-Sugar) Regulations 2017 will examine the impact of the Code since its introduction in April 2017, and whether it remains appropriate to use this additional regulation to oversee the conduct of sugarcane growers to sugar millers to marketers.

CEO of the Australian Sugar Milling Council David Pietsch said that against a backdrop of depressed global sugar prices, the review provides a fresh opportunity for the industry to reset, and remove regulatory impediments that threaten to consign it to a low-growth future.

“The most important relationship in our industry is that between a grower and their milling company, and together they are facing enormous challenges to their profitability and social licence to operate, Mr Pietsch said.

“Subsidised sugar from the subcontinent is flooding the world market and depressing prices, while the responsible consumption of sugar in a balanced diet is under intense scrutiny here at home,” Mr Pietsch said. 

“These big ticket issues are eroding the sugar industry’s future viability, and we need to work collectively – growers and millers – to advance the industry’s reputation and commercial prospects. In the long-term, less regulation that helps create an environment for innovation and investment is our best way forward.”

The Australian Sugar Milling Council has previously opposed the Code, along with related Queensland-based legislation, on the following grounds:

  • The industry is already over-regulated, and sufficient agreements and negotiation processes already exist to assist growers and millers.
  • The regulations deliver no net benefits to the industry and regional communities.
  • Clearly more work is needed to build trust within the industry, however the Code has set these efforts back, and removed opportunities to build trust in a mature, commercial manner.

“Milling assets have been de-valued as a result of the regulation and future mill capital investments now face a higher level of uncertainty, so if market conditions improve, upgrades and expansions will be more limited,” Mr Pietsch noted.

“We are looking forward to the review process, however our opposition to the Code remains unchanged.”