Sugar subsidies
June 22, 2009
At Haribo factories in 18 different locations in Europe, including the one in Bonn, Germany, glucose syrup, sugar and fruit flavoring are transformed into chewy frogs, juicy berries, and the classic Haribo gummy bears.
The recipe is a secret, but a representative company admitted that they do use a lot of sugar, the second ingredient in their gummy sweets.
Recently, trucks were coming and going from the Haribo factory in Bonn, bringing ingredients in and sending finished gummies out into the world. One of the trucks making a delivery is from Koelner Zucker, a sugar company based in Cologne, just north of Bonn.
The majority of the sugar Haribo uses comes from Europe. To keep cheap, non-EU sugar from flooding the European market and putting European sugar producers out of business, the EU sets sugar prices and taxes sugar imports. That makes EU sugar more expensive than sugar bought on the world market.
Making up the difference
This creates a problem for companies like Haribo that do business internationally. To support firms exporting to non-EU countries, Ulrich Preusser, head of Haribo's legal department, said that the EU provides so-called export refunds.
"We get the price difference between the sugar price in the EU and world market price," said Preusser. "We get this money only for our goods we sell to non-EU countries and it's only because we are in competition there with producers who can produce outside the EU and who can buy their sugar at the world market price."
Haribo gummy bears, one of Germany's most successful exports, are beloved around the world. In fact, 100 million bears are produced every day and the majority of them are bound for Haribo fans outside of Germany.
Pruesser says Haribo would rather pay competitive prices for their sugar, but until the EU lifts its agricultural protections, the candy-maker needs the export refunds, which amounted to 330,000 euros last year.
"If we didn't get this money, we would be forced to cut the employment partially in Europe and produce these products outside of Europe, for example in Turkey, where we can buy sugar at the world market price," Preusser said.
Without these subsidies, it is quite possible that Haribo's original German theme song might not have been translated into so many languages. But for now, as the song says, "kids and grownups love it so, the happy world of Haribo."
Holly Fox/av
Editor: Trinity Hartman