Pepperidge Farm's largest plant is in Denver, Lancaster County and a lot of sugar flows through it.
“This company buys about 30 million pounds of sugar a year,” said Kelly Johnston, vice president of government affairs for Campbell's Soup, Pepperidge Farm's parent company.
Worldwide, Hershey spent more than $6 billion on sugar last year, and the original plant in Dauphin County likely paid more for that sugar than their plants outside the United States. That's because American farm policy guarantees minimum sugar prices and restricts competition from imports.
U.S. Senator Pat Toomey (R-Pa.) calls that an artificial sweetener for growers and a raw deal for taxpayers, who he says get dinged twice.
“Some of their tax money goes to subsidize wealthy sugar producers, no good reason for that,” Toomey said. “Then, when they go to the grocery store to buy food, a lot of our foods have sugar in it, they have to pay an inflated price. It makes no sense.”
Toomey says politics is trumping good public policy.
He says sugar cane growers in the South (Florida, Louisiana and Texas) have teamed up with sugar beet growers in the upper Midwest (mostly in Minnesota and North Dakota) to lobby their lawmakers to keep the cash coming. The sugar subsidies began in the 1980's.
“That's been an unholy alliance that have kept these taxpayer subsidies going to people that shouldn't be getting them,” Toomey said.
If you're thinking big-time, big-revenue companies like Hershey's and Pepperidge Farms can afford to pay more for sugar, the fact ism they don't; customers do.
Sugar producers argue that American sugar policy protects American jobs. But Toomey asks, “at what cost?” he says the U.S. Department of Commerce studied this very issue.
“It turns out we destroy three jobs for every job that we create or save in the production of sugar. It makes no sense on any level for the government to be doing this,” Toomey said.
So Hershey and Pepperidge Farm, and other bakers and candy makers, continue producing in the midstate knowing they could basically cut their sugar bills in half by moving to Canada or Mexico.
“That tells you the competitive disadvantage that we are facing on a global scale,” said Johnston.
Toomey prefers repealing the entire sugar program, but recently supported an amendment that would greatly reduce it. It failed in the Senate by five votes. Toomey promises to keep up the fight against what he considers unnecessary corporate welfare.
“We're not asking for a subsidy,” he said. “We're not asking for the growers to be sending checks to the consumers. How about we just get to buy sugar at a fair global market price?”