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Soft Drinks (Sugar Allocation)

Volume 464: debated on Thursday 28 April 1949

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Motion made, and Question proposd, "That this House do now adjourn."—[ Mr. Snow.]

10.12 p.m.

The transition of the House from steel to sugar will, I hope, prove succulent and soothing, as will, I trust, the reply forthcoming from the right hon. Lady the Parliamentary Secretary to the Ministry of Food to the very reasonable requests which I am now to submit to her. I invite the attention of the House and of the Parliamentary Secretary to the fact that the observations which I make are not condemnatory but are exploratory.

The story commences during the short Session which was held in September last. On 14th of that month, during the Adjournment Debate, my hon. and gallant Friend the Member for Down (Sir W. Smiles) raised the question of the shortage of sugar in mineral waters, particularly in regard to the export trade, which would suffer if the standard did not improve, and thereby reduce our dollar earnings. He was anxious to bring the matter to the notice of the Ministry of Food and the President of the Board of Trade, as he had just received a letter on the subject from a constituent in the mineral water industry. No reply was forthcoming upon that occasion.

During the Debate on the Gracious Speech which opened the present Session, the right hon. Gentleman the Minister of Food intervened in order to announce to the House certain increases in sugar allocation. He stated that an extra quantity had been bought, and among the industries to which he said he intended to make an increased allocation were included biscuits, golden syrup, cakes, coffee essence, corn flakes and table jellies. He went on to add that it was intended to complete the de-rationing of jam, to increase the sweet ration—of course we know the sequel to that—and to increase the domestic sugar ration from 8 oz. to 10 oz. As the right hon. Gentleman was resuming his seat at the end of his speech, the hon. Member for Rothwell (Mr. T. J. Brooks) asked this question:
"Is my right hon. Friend trying to do anything for the soft drinks industry?"
to which the Minister replied:
" Yes, but it will be very little."—[OFFICIAL REPORT, 1st November, 1948; Vol. 457, c. 612.]
Of course, "very little" is difficult of definition, but at least it must mean something. A few days later, on 12th November, I put down a Question to the right hon. Gentleman asking him:
"What increased allocation of sugar will be made to the soft drinks industry consequent upon the changes announced on 1st November?"
To this the Minister replied:
"As the soft drinks industry were not subjected to the 25 per cent, cut in sugar allocations which took effect on 4th January, 1948, for other sugar using manufacturers, I regret I cannot agree to their participating in the increase recently granted."—[OFFICIAL REPORT, 12th November, 1948; Vol. 457, c. 213.]
That meant they would get nothing. That was a contrary expression of view by the Minister in charge of the Department within a period of 12 days. Early this year, in an attempt to find out what was really in the mind of the right hon. Gentleman, I again put down a Question asking:
"What allocation of sugar he has in contemplation for the soft drinks industry during 1949?"
To this the Minister made the illuminating reply:
"This will depend upon the amount of sugar available"—
which at least displayed a firm grasp of the obvious which is not often forthcoming from that Ministry. I asked a supplementary question:
"Can the right hon. Gentleman tell us whether he intends that this industry shall participate in any future increased distribution which he is able to make?"
To which the Minister replied:
"I cannot commit myself about future Increased distriblItions."—[OFFICIAL REPORT, 14th February, 1949; Vol. 461, c. 781–2.]
There was then a supplementary question from the benches opposite on the subject of the domestic ration which I need not read.

1 now come to the Debate on the Adjournment on 18th March this year instigated by my hon. Friend the Member for Evesham (Mr. De la Bère) who brought up the question of sugar supplies in general, demanded increased distribution and addressed himself to the whole question of the possible total de-rationing of this product. On this occasion it was the right hon. Lady who replied, as she invariably seems to have to do whenever there is an Adjournment Debate on these matters. She said that my hon. Friend was right and that there was plenty of sugar in the world but that we could not afford the dollars to buy it. Then came an interruption from my hon. Friend suggesting that non-dollar areas possessed great supplies, and she said that all available supplies from the Commonwealth and soft currency countries were bought by her Department. She might have added that another of her difficulties has been Treasury resistance to the finding of the cost-of-living subsidies which an increased distribution of sugar would entail. During that discussion my right hon. Friend the Member for Antrim (Colonel Haughton) asked for a fresh review of the situation in which the high grade mineral water manufacturers found themselves today, to which the right hon. Lady replied:
"Yes, we will look at the position of the manufacturers again."—[OFFICIAL REPORT, 18th March, 1949; Vol. 462, c. 2563]
That is where we are now. I now desire to appeal to the right hon. Lady about the position of the industry at this moment. May I add that there has been delay in bringing this matter on, because I have been balloting since 14th February and we are now nearly in May. The industry is befogged and bewildered. With a few exceptions, such as soda water, sugar is the essential ingredient in all soft drinks. They are classed as food and fall under the jurisdiction of the right hon. Lady's Ministry, which recognises the full value of sugar. The importance of the industry was recognised by the Government during the war when vital factory space was allocated to the production of soft drinks.

The industry is now attempting to supply 150 per cent. of the datum period —1938–39—demand with only 62½ per cent. of the datum period sugar allocation, so that the public is only getting 50 per cent. of the sugar content as compared with the pre-war standard. This drastic reduction is not in keeping with the Ministry's declared intention of raising the quality of foodstuffs wherever practicable. I add these figures for the benefit of hon. Members. Compared with the datum period consumption of 125 million gallons of drinkable liquid per annum in this country, production was raised to some 170 million gallons during 1947, and today consumption is running at the rate of approximately 200 million gallons, which places the industry in this dilemma. Anxious as they are to meet public demand, they are unwilling to increase quantity at the expense of quality.

Now, Sir, we are entering the summer months. The position will be particularly difficult if we are in for a hot summer. I have been in touch today with the secretary of the Soft Drinks Association to ask how they fared, as far as demand is concerned, during the abnormally hot and pleasant Easter holiday from which the House has just returned. He told me that a manufacturer in Southend, a popular resort, and one or two manufacturers in London have already stated that, as far as they are concerned, the Easter sales of soft drinks this year have established an all-time record for this particular ticular holiday and that if this abnormal weather continues for a few weeks, then at the end of three months they will have used up the whole of their sugar allocation and there will be none left to cope with the August and September holidaymakers and, may I add, with the agricultural workers during harvest time—and they are very considerable consumers of these beverages.

Furthermore, we have to consider the tourist traffic. We are very anxious to earn dollars by attracting tourists from the American continent. There are large numbers of visitors expected from the United States and Canada, where soft drinks standards are naturally higher than our own at the present time. There is an analogy, if I may suggest it to the right hon. Lady, between these anticipated visitors, who can help us with their dollars, and the American and Canadian Service men who were stationed in our country during the war helping in a very different task. It was made quite clear to the authorities at that time that these Service men from the other side of the Atlantic would not be content with the standard British product and, accordingly the Ministry of Food of that day arranged for a special, extra allocation of sugar for them and they were supplied with a super-standard product.

The special position of this industry, having suffered five years of rigid concentration, with over 300 factories totally closed, and the phenomenal increase in public demand for its products, surely warrants a substantial increase in its sugar allocation at the earliest moment. Since de-control in February last year, the Minister has on more than one occasion expressed himself satisfied that there has been no unreasonable increase in prices charged to the public. The plea I want to make to the right hon. Lady is this—and I hope I am leaving her sufficient time to give a comprehensive and satisfactory reply. Can she not give us some indication now, at the beginning of the summer season, of what the 1949 allocation is likely to be so that manufacturers will be able to make plans in time to meet the summer rush?

As I indicated at the commencement of my remarks, great confusion was caused by the contradictory statements of her right hon. Friend in November last. That was the beginning of the trouble, contradiction causing uncertainty. With the situation as it is now, with the right hon. Lady's well-known sympathy for the rising generation, who are very large consumers of the various mineral waters, and with the prospect and possibility of a very hot summer, may I appeal to her to go to the Box tonight and give a helpful and, as I have suggested, a soothing and sympathetic answer in time for these manufacturers to meet what we all hope will be a warm and pleasant summer.

10.25 p.m.

After that most attractive peroration of the hon. and gallant Gentleman the Member for Holderness (Lieut.-Com- mander Braithwaite) I should like to do as he suggests. He represents a constituency in which, no doubt, the soft drinks industry is represented, but he must remember that he also represents other industries which are using sugar—for example, the confectionery industry. Nor must he forget that he represents the housewives, who also want to have their domestic ration increased. We as a responsible Department must look at the demands not only of industry, but of the domestic consumer, and we have to weigh the needs of each industry.

I know this industry very well, and I know many of the men who are responsible for producing soft drinks, and I do not think the hon. and gallant Gentleman is right when he says that they are in a confused state. He must know enough about my Department to know, as I have said before, that our door is always open; the trade is always using it, and every commodity division sees to it that the trade is kept informed of the position. I think I will be able to prove to the House that, far from the soft drinks industry being treated in a niggardly manner by my Department, we are being not ungenerous to them in relation to the amount of sugar received by other industries.

It could be argued that the soft drinks industry is not a necessity, but we do not take that view. We recognise that soft drinks add variety to the diet, and therefore, we have made them an allocation which, I think, the House will agree is not ungenerous. The hon. and gallant Gentleman has mentioned the 62½ per cent. of datum usage. I want him to compare that with our present allocation to the cake and flour confectionery industry which, I think—and I believe every woman in the country would agree with me—makes an even more important contribution to the diet. It is getting only 55 per cent. of datum usage, against the 62½ per cent. for soft drinks. The ice cream industry, which, I agree, is not so important to the housewife as cake and flour confectionery, is getting 57½ per cent.

I agree that during the war the allocation to the soft drinks industry was cut down, just as supplies of other goods which were short were cut down to other industries. But I want to show the hon. and gallant Gentleman how the allocation has gradually increased, in order that he may rest assured that this industry is well in our minds. In 1940 they had 40 per cent. of their datum usage of sugar. For 1942 to 1946 they were cut down—drastically, I agree—to 20 per cent., but in 1946–47 we increased the allocation to 40 per cent. In 1947–48 we increased it to 50 per cent. and in February, 1948, to 62½ per cent. This shows that when this and other industries come and make representations to us we consider them and try to allocate as fairly as possible.

It must be borne in mind also that the soft drinks industry qualifies for replacements of sugar, in cases where sugar is used in meeting the priority demands of N.A.A.F.I. and so on. If we include that, the soft drinks industry is geting 65 per cent. of the actual pre-war usage. Again, as I have already said, that compares with the figure for the sugar and flour confectionery industry of only 55 per cent.

Has there been the same abnormal increase in the demand for confectionery as there has been for soft drinks?

I think Members of the House have only to ask their wives whether they want extra cakes and whether they find it easy to get cakes of the quality they would like. Probably every town in the country would like extra cakes of a higher quality, of a higher sugar and fat content. We do not deny that, but we have had to allocate our scarce supplies throughout the country. I am sure that the hon. and gallant Gentleman would like to know the exact figures. The total tonnage of sugar used by the industry in 1947 was 27,238 tons; in 1948, 32,329 tons; and the estimate for this year, 1949, 32,500 tons.

It was decided in 1947, as I think the hon. and gallant Gentleman mentioned to deconcentrate the soft drinks industry. It was agreed that the Minister would see that the allowance on deconcentration did not drop below 30,000 tons of sugar, and that de-concentration would take place on 1st February, 1948. In January, 1948, a month before, we had to announce to all manufacturers of commodities which contained sugar as an ingredient that we would have to impose a 25 per cent. cut. But we had already pledged ourselves in 1947 to the soft drinks industry that we would keep their allocation at 30,000 tons. The two positions could not be reconciled. So we said to the soft drinks industry, "Though we are cutting every other manufacturer in the country, we will keep our pledge. You can carry on and deconcentrate and we will fix your sugar allowance at 62½ per cent."

I think the House will agree that my Department showed good faith in this matter. It would have been entirely wrong to promise to deconcentrate this industry and then change our minds in a few months, after these men, who have built up businesses respected throughout the country and whose names have become household words, had made their arrangements for deconcentration. We kept our promise; but later on in the year when it came to considering giving a little additional sugar to the people whose allocation we had cut by 25 per cent., surely we were right in saying to the soft drinks industry, "We kept our promise and did not cut your allocation. We cannot give you this extra now." That is the position, and I think I can justify it at this Box. I think that if the hon. and gallant Gentleman, whom I have always regarded as a fair-minded opponent, were doing this job, he would have acted in exactly the same way.

The hon. Lady's right hon. Friend said that he was going to do something and he said that on 1st November. That is the trouble.

We were, of course, reviewing all the industries which used sugar. If a sudden supplementary shot was fired at my right hon. Friend, who had it in his mind that we were reviewing these industries, I do not think he was guilty of a colossal error when he said he was looking at it. Actually, we had looked at it. If we had felt there would be so much sugar available, we might have granted the industry something; but I do not think the House can charge my right hon. Friend with treating the industry unfairly in view of the past history of this question.

In February, 1949, the industry came to us and asked for a substantial increase. The House will agree that it would have been a substantial increase when I say that it came to about the level of 95per cent. of datum usage Surely the hon. and gallant Member for Holderness, in the light of other allocations, would not ask that my Department should give the soft drinks industry 95 per cent. of its datum usage. That was in February. The Council of the Soft Drinks Industry stated its intention of increasing the nutritional content of soft drinks, but we were of the opinion, and I believe rightly, that possibly cake and flour confectionery had a greater claim in this respect.

The hon. and gallant Gentleman has mentioned the Debate on sugar which was raised on the Adjournment by the hon. Member for Evesham (Mr. De la Bère). I went to great trouble to give the hon. Member details, but hon. Members on both sides will agree that it is very difficult to satisfy the hon. Gentleman the Member for Evesham. I gave him the details of our domestic sugar consumption, the manufacturing consumption and of the supply and demand position, and said that unfortunately the supply did not yet meet the demand. I do not want to weary the House with those figures, but if the hon. and gallant Member will look up the Adjournment Debate, he will be assured once more that we have not a big stock of sugar which we are not producing and are keeping aside for some purpose of our own.

Can it be argued that this industry is suffering because it is not producing a gallonage sufficient to give it a reasonable profit? I think that the hon. and gallant Member could not argue that. What are the figures? The total production of soft drinks pre-war was estimated at 125 million gallons expressed as ready-to-drink beverages. The House will realise that one has, of course carbonated soft drinks and squashes. Expressed as ready-to-drink beverages, 125 million gallons was the total production, and 147 million gallons was taken as the target for the industry's production under the concentration scheme. We recognised that target in our allocations.

What we did amounted to guaranteeing 147 million gallons during concentration. I would like to give the House these figures because I think hon. Members will agree that the soft drinks industry has not suffered overmuch during the war so far as gallonage is concerned. In 1944, production was 133 million gallons; in 1945, it was 144 million gallons; in 1946, it was 152 million gallons; and in 1947. it was 156 million and in 1948, it was 173 million gallons. In the following year, the first year of deconcentration, the production is estimated at the rate of 200 million gallons. I do not think the hon. Member can say that the industry is suffering.

I know that the industry would like to increase the sugar content. Consumers also would like to have more sugar in all foods. No one can argue, however, that this particular industry has been unfairly treated. I will give two figures which I think are relevant so far as imports and home consumption are concerned. We allocate 2,035,000 tons of sugar a year. Estimated supplies in that period are 2,063,000 tons. This leaves us with only a small safety margin.

This is the sugary word which the hon. Gentleman asked for, and which we have given to the industry. The industry asked for 95 per cent. of the datum period consumption of sugar in February. We had to refuse, but we did say that its needs, together with those of other manufacturers, were in our minds. We have invited them to come to see us in a few months. I cannot promise more, but I must leave the hon. and gallant Gentle- man and hon. Members with these figures in their minds. If they will read them and carefully consider them, they will appreciate that the soft drinks industry is not being ungenerously treated.

I think the right hon. Lady suggested that my hon. and gallant Friend had said that the Minister had been guilty of treason towards the industry.

I do not think used the word "treason." I think I said he suggested that the Minister had been ungenerous.

I think the right hon. Lady was saying that it was not reasonable on our part to accuse the Minister of something serious towards the industry. All that my hon. Friend was accusing the Minister of was a breach of a specific undertaking and in all the right hon. Lady has said she has not been able to acquit him of that charge.

Question put, and agreed to.

Adjourned accordingly at Twenty-one Minutes to Eleven o'Clock.