Not So Splendid For The Maker Of Splenda: Tate & Lyle Loses Trade Commission Case.
By: Ainsley Brown
Tate & Lyle, the makers of Splenda, lost its appeal last week in the US International Trade Commission (ITC) in its bid to keep out an imported Chinese substitute to Splenda.
The company initiated legal action in April of 2007 against a group of Chinese companies and six importers, after non-Splenda sucralose began appearing in the US market. Tate & Lyle alleged that the Chinese sucralose was manufactured using its trade secrets. However, the ITC found in its initial ruling, set down in September of last year, that this was not the case. The Chinese sucralose was in fact produced using its own process independent of any patents held Tate & Lyle. As to be expected Tate & Lyle did not like the ruling and appealed. It again lost on appeal.
This was a big blow to the UK based company, not just because of the high legal costs, an estimated £10 million, according to the Times. No. Much more important is that it now faces the strong potential of cheaper Chinese imports flooding its most lucrative market – the US. This new reality, and this may help to explain why it spent so much trying to defend its brand, will have to be accounted and adjustments made to the company’s strategic plans.
This adjustment will be no mean feat for the managers of the company. This is because it had counted on Splenda being a major profit driver in the future, namely amongst is soft drink clients – read Coca- Cola and Pepsi Co. The ITC ruling therefore has major consequences for the company’s re-branding drive as a food and ingredients company rather than a sugar-commodity driven company.
