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Salada judgment expected tomorrow

Salada Foods Jamaica Limited (SALF) said it was notified it will receive the court’s judgment on its application for judicial review of a decision taken by the Jamaica Agricultural Commodities Regulatory Authority (JACRA) tomorrow, November 6.

Salada will receive the court judgement on its coffee formula requirement, as proposed by JACRA tomorrow.

The two entities are in court over JACRA’s demand that Salada adjust its formulation of instant coffee from 10 per cent local coffee content to 30 per cent.

Salada projects that the increase in premium coffee in its blend would destroy its local market as a consequence of price increases.
Salada is seeking to block the enforcement of the rule in court. Court hearings were held in September after Salada’s August 31 filing to block the regulator after talks between the two failed.

The conflict between the industry regulator and Salada began in March 2019, when JACRA first made its demand, but Salada has resisted, insisting the move would cannibalise its local market which depends on output of cheaper instant coffee.

On August 18, 2020, Salada disclosed it received a letter from JACRA directing it to include 30 per cent local coffee content in the formulation of its instant coffee powder effect September 1, 2020.

Presently, Salada uses 10 per cent local coffee, the company said.
In a release, Salada’s management said, “Unfortunately, JACRA’s edict to change the instant coffee formula will be detrimental to the company’s cost of sales.

“It will also materially change the taste profile of its Mountain Peak Coffee brand which currently enjoys over 50 per cent market share of the instant coffee sector, and we are unsure of how receptive consumers will be to this.”

The company said then it was still hoping to persuade the regulatory authority to change the requirement.
It requested a meeting with the Minister of Commerce, Agriculture and Fisheries JACRA “to discuss their directive and the impact it will have on Salada’s operations”.

However, the matter ended up in court with the ruling expected to outline the bounds of the regulator’s influence.

The instant coffee produced for the local market is primarily made with cheap green bean imports, but JACRA has been trying to increase take-up of local green beans by Salada which is the largest local manufacturer.

The green been for which JACRA wants increased input is a pricey, globally recognised commodity.

Local green bean sells in the region of US$25 per kilogramme compared to imported varieties which retail for less than US$5 per kilogramme. Imported beans are the principal content in Salada’s cheaper products made for the local market.