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Relief for PureCircle as Chinese stevia held at US border released

By Elaine Watson+

10-Jan-2017
Last updated on 10-Jan-2017 at 20:22 GMT2017-01-10T20:22:02Z

Relief for PureCircle as stevia held at border released

US Customs and Border Protection (CBP) has released shipments of refined stevia from PureCircle coming in from China that had been held at the border based on allegations that they contained stevia produced using forced labor. 

The shipments were released following a review of “substantial, detailed traceability documentation provided by PureCircle, including independent, third-party verifications,” said PureCircle CEO Magomet Malsagov.

“PureCircle is committed to human rights and fair labor practices globally in all parts of its business and supply chain. We operate a robust system of checks and balances to ensure that all our suppliers adhere to a strict supplier code of conduct. We are pleased that the CBP has confirmed that PureCircle’s shipments are compliant with the law and have been released.”

PureCircle is now working with CBP on the removal of the Withhold Release Order (WRO) in order to ensure that there is no further disruption to its shipments, he added. 

CBP has confirmed that PureCircle’s shipments are compliant with the law

In response to questions by CBP, PureCircle provided documentation including an audit report from Bureau Veritas  (a 3rd party inspection service) which PureCircle says found no evidence of force, bonded or involuntary prison labor; proper procedure of assessing suppliers; and proper traceability systems to trace each batch of extract produced to leaf supplier.

It also supplied a SEDEX Members Ethical Trade Audit which it says found no evidence of forced, bonded or involuntary prison labor; and conformance with regulations regarding employment freely chosen, child labor, and regular employment.

Impoundment had 'significant negative impact on our market in the US'

In its most recent trading statement issued on January 5, PureCircle said sales in the first half of fiscal year 2017 were expected to be down 14% year-on-year to $47m as a “direct consequence” of the “detainment of shipments by US Customs Border Protection, partially offset by strong growth in the rest of the world,” while it anticipated a net loss of $2m.

It added: “The impoundment of our shipments and the inclusion of PureCircle's name on the Withhold Release Order has inevitably had a significant negative impact on our market in the US, hence adversely impacting our H1 results. The US market constitutes one third of our sales.”

The bigger picture: Rising obesity and diabetes, sugar taxes

However, he added: “H1 FY17 has seen continued positive market sentiment for stevia… I am particularly excited to see our expansion in Latin America and South Asia with a new office being opened in India.

“The macro market trends continue to develop in our favor with increasing global obesity and diabetes trends well documented. The implementation of sugar taxes in various countries has also added to the momentum of our industry.”

New refinery to be commissioned in Q1 2017

On the R&D front, meanwhile, he said: “We have progressed our R&D and leaf development programs by conducting large scale field trials of new leaf varieties with high content of better tasting novel natural sweeteners Reb M and Reb D. These new leaf plantations are planned to be scaled to thousands of hectares beginning in 2017.”

A new, $42m fully automated processing plant– which will ultimately double capacity to produce its proprietary stevia leaf extract and will include a line for its new Zeta ingredients (click HERE ) - will be commissioned in Malaysia in the first quarter of 2017, he added.

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