Sugar tariffs may sink icon
You may want to pick up a pack of Necco Wafers or one of those little boxes of candy hearts while you can. It is possible they may not be around for long.
If so, part of the blame rests with Uncle Sam.
The New England Confectionary Co., maker of those and other candies, has filed for Chapter 11 bankruptcy protection. Whether a buyer can be found to resuscitate the company is in question.
Necco, the acronym for the company as well as the name of one of its products, faces various financial and management challenges. The cost of producing confections clearly is a factor.
Like other American firms specializing in sweets, Necco is at a disadvantage against many foreign competitors. Specifically, U.S. consumers, both corporate and individual, pay substantially more than necessary for sugar.
That is because of a decades-old law enacted solely to protect U.S. sugar producers from foreign competition. It sets quotas for certain sugar imports, then slaps a stiff tariff on some.
Without that tariff, Americans would pay an estimated $1.4 billion less a year to satisfy our sweet tooth.
Few other industries enjoy similar protection, allowing them to keep prices up. Like so many other “farm support” programs, the sugar tariffs have been under attack for years. Each time, the industry’s lobbyists manage to maintain their advantage.
Meanwhile, job providers like Necco that rely on sugar as a raw material suffer – and sometimes close their doors. That is far from a sweet deal for consumers and the economy in general.