Business
JM | Nov 26, 2020

Pot bubbles in Salada’s Supreme Court coffee case

/ Our Today

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Company awaits written judgment to make next move in JACRA impasse

(Images: SaladaFoodsJa.com)

Salada Foods has advised that it is awaiting the written Supreme Court judgment dismissing its coffee content case against the Jamaica Agricultural Commodities Regulatory Authority (JACRA) before making its next move.

Salada had filed an application to the court for leave to apply for a judicial review and permission to appeal an order from JACRA ordering the company to increase local coffee content from 10 per cent to 30 per cent in its instant products.

However, in its ruling on November 13, the Court dismissed Salada’s application and ordered the coffee maker to adjust its formulation of instant coffee as required by JACRA.

In a regulatory filing with the Jamaica Stock Exchange, where its stocks are traded, Salada indicated that, “the Judge advised that a written judgment will be provided. Salada awaits same to assess the reasons given therein by the Judge for denying its application.”

DETAILS OF ORAL JUDGMENT

Salada further advised that presiding judge, Justice Anne Marie Nembhard, delivered an oral judgment denying its petition in which she ruled, among other things, that JACRA had the power under the Jamaica Agricultural Commodities Regulatory Authority Act to make regulations, including Regulation 19, and that instant coffee manufactured by Salada was the subject of Regulation 19.

She further ruled that JACRA had no power to grant a waiver to the requirements under Regulation 19 and, accordingly, Salada could not have a legitimate expectation that a waiver should be granted.

Salada’s court action sought, among other things, leave to apply for judicial review to seek orders certiorari and mandamus for the decision taken by JACRA pursuant to Jamaica Agricultural Commodities Regulatory Authority Regulations 2018 Section 19.

Arising from the ruling dismissing its case, Salada must now include 30 per cent local coffee content in the production of its instant coffee powder with effect on September 1, 2020.

In its ruling, the court held that JACRA does not have the power to grant any waiver to Salada, as JACRA’s powers are limited to what its statute provides (the JACRA Act and regulations). Giving this finding, there can be no legitimate expectation of an authority to act outside of its legislation.

However, Salada is insisting that the increased local coffee content will change its instant coffee formula, which will be detrimental to the company’s cost of sales.

INCREASED FORMULATION WILL CHANGE SALADA COFFEE TASTE

According to Salada, the move will 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 the company is unsure of how receptive consumers will be to this.

JACRA has stated that it will not be extending the 10 per cent local coffee content waiver, which Salada has been enjoying since January 2018.

JACRA, which was established for the development, regulation, and standardisation of the agricultural commodities (coffee, cocoa, coconut and spices) industry, is insisting that Salada comply with its imposition of the 30 per cent local coffee content.

Salada Foods was first granted permission to use 10 per cent of local coffee in its instant coffee products in January 2018. This was following on the low production of Jamaica High Mountain Coffee, which resulted in low availability for Salada’s purposes.

The permit was further extended to Salada Foods on April 18, 2019, and expired December 2019 with JACRA declaring that it would not extend the waiver any further.

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