§ Mr. Mike Thomas
asked the Secretary of State for Prices and Consumer Protection what effect the increased cost of sugar supplied under the Commonwealth Sugar Agreement will have on the Retail Price Index.
§ Mrs. Shirley Williams
The agreement to pay £140 per long ton f.o.b. for shipments of raw sugar under the Commonwealth Sugar Agreement between 1st September 1974 and 31st December 1974 would give rise to a wide differential between the prices of refined cane sugar and refined beet sugar. In order to avoid the resulting distortion of competition in the food industry and inequity between different groups of consumers, it has been decided to introduce a price equalisation scheme for sugar. The scheme, which has been drawn up in consultation with the industry, will be administered by the Sugar Board and will come into operation on Monday next 4th November.
The scheme will take account of price increases notified to the Price Commission by the refiners of cane and beet sugar. In view of the exceptional circumstances, including in particular the need to introduce the equalisation scheme quickly, it would not be appropriate to require the refiners to wait the usual 28 days before implementing price increases, and following consultation with the Price Commission I have signed the Counter-Inflation (Notification of Increases in Prices and Charges) Order 1974 which will enable the increases to be announced immediately.9W
Under the scheme the ex-refinery prices of granulated sugar for the retail market will rise to around £190 per ton and as new supplies reach the shops retail prices will increase by 4½p to 5½p per 21b.bag. This should produce a price in large shops of 18½p to 19p for sugar produced by the British Sugar Corporation, Tate and Lyle and Manbre, which includes Sankeys and Westburn sugars.