The high cost of production and competition from imported goods is taking the sweetness out of business for local manufacturers of chocolates and confectionary.
Sri Lankan manufacturers of chocolates and sweets met last Friday to discuss the crisis that has hit the industry. They say that costs, inflation and consumer buying power have cut growth by 10 percent, threatening an industry that employs an estimated 200,000 people.
Speaking to the media, following the Lanka Confectionery Manufacturers’ Association annual general meeting, the organisation’s newly re-elected president Quintus Perera (not the writer) said the local confectionary industry was not getting the support it needed.
Mr. Perera said consumers were turning increasingly to imported confectionary, including chocolates, which are being sold at highly competitive prices, and that not all imported confectionary was of a high standard .Meanwhile, local manufacturers had to import almost all of their raw materials, all of which are heavily taxed: in addition to the 28 percent duty on raw materials, manufacturers must also pay another 25 percent in cess charges.
Complicated procedures are required for the import of gelatin, a key raw material used in the production of jujubes, marshmallows and other confectionery products. Manufacturers must apply to the Department of Animal Production and Health, Peradeniya, which issues a letter to the Controller of Imports and Exports, who then grants a licence for the import of gelatin. Meanwhile, wholesalers were importing confectionary and gelatin-based confectionary products, such as cup jellies, without any restrictions, he said.
Mr. Perera believes that the government should take steps to protect the local chocolates and confectionary industry.