Salada Foods Jamaica Limited (SALF) – Disclosure of JACRA’s Demand

Salada Foods Jamaica Limited (SALF) has advised of J.ACRA’s demand of 30% local coffee input in locally manufactured instant coffee, as follows:

“Salada Foods Jamaica Limited (Salada) wishes to apprise its shareholders and stakeholders of the latest developments in our ongoing discussions with JACRA regarding its requirement for 30% local coffee input in our locally manufactured instant coffee powder under our brand Mountain Peak.

“As discussed at our AGM held on February 20, 2019 Salada received a letter from JACRA dated February 11, 2019 that inter alia states that Salada must commit in writing to increase to 30% the local coffee content used in our manufacturing process to produce our instant coffee by the end of June 2019 and a failure to do so will result in JACRA withholding any further approvals to Salada to import coffee green beans used in manufacturing our instant coffee powder.

“Salada has interpreted JACRA’s letter as a demand to Salada to change the formula of its instant coffee powder. Increasing the local coffee input from its present 10% to 30% will materially impact the integrity and change the taste profile of Salada’s Mountain Peak brand instant coffee powder, which Salada has spent significant time and expenditure through research and development to perfect over several decades. The input of 30% local coffee content will also significantly increase the cost to Salada to produce instant coffee and thus the level of profitability of Salada going forward.

‘We at Salada find it unfortunate that JACRA has seen it fit to dictate change in its formula for instant coffee powder without first consulting with us, the only 60 year old manufacturing company of instant coffee powder in Jamaica and the English Speaking Caribbean, and without having any regard for the impact it could have on the viability of Salada’s business and effect on its shareholders.

“Salada, however, remains committed to working through the challenges imposed by the Government on the operation of its business and intend to continue lobbying with JACRA and the Minister of MICAF for a  change in their policies towards locally manufactured instant coffee powder. We will continue to keep Salada’s shareholders and stakeholders updated as we progress.”