Costly Sugar Pushes Candy Plant to Canada

March 25 -- Gina Martin has worked since high school at Kraft Foods giant Life Savers plant in Holland, Mich. It's where she expected to work until retirement, as did many of her friends and relatives who live in this western Michigan city.

But the divorced mother of two teens is now out of a job, and for reasons well beyond her control. "I'm angry," says Martin. "I'm upset. I'm frustrated."

That's because Kraft has decided to close the Life Savers plant — which has operated under various owners for 35 years — and move a thousand jobs to Canada.

Why? The price of sugar in the United States is just too steep, says Kraft.

And indeed, American sugar costs at least twice as much as foreign sugar due largely to strict federal limits on imported sugar and generous price supports for sugar cane and sugar beet farmers.

Add to that the fact that the North American Free Trade Agreement has made it easier for American companies to move their businesses to Canada and Mexico, and you have a problem for domestic workers.

‘We Offered Them the Store’

Holland tried mightily to keep Kraft in town. "We offered Kraft the store to stay in Holland," said Mayor Al McGeehan.

With Michigan's help, the city offered Kraft a 15-year tax break worth $25 million. But the candymaker said it could save $90 million over the same period simply by using the less expensive sugar available in Canada.

McGeehan said he's yet to have a real conversation with Kraft about their move. And he's upset about that.

"There are common courtesies that were not extended in this entire process," he said.

In Chicago, Sal Ferrara sympathizes with the mayor's plight, but he says business is business.

Ferrara heads the Ferrara Pan Candy Co. which has made candy on the same corner on the southwest side of Chicago for years.

He says he won't shut down his plant, but won't be expanding any of his business within the United States. "Never," he said. "I'd have to be crazy."