Candy cane jobs leave U.S. for Mexico

Bryan, Ohio, factory loses most of its work to where sugar is cheaper

December 26, 2003|By Rachel Osterman | Rachel Osterman,CHICAGO TRIBUNE

BRYAN, Ohio - Here in what could be called the candy cane capital of the world, residents like to boast that food doesn't get more American than this old-fashioned, red-and-white striped confection.

That's because more than 90 percent of those peppermint canes are consumed within the United States. And, it used to be, they were nearly all made domestically as well.

No more.

In the past three years, nearly half of all U.S. candy cane production has shifted to Mexico, industry experts say.

That's true of the candy cane maker based in this northwest Ohio town, Spangler Candy Co., which recently opened a plant in Juarez that generates half of Spangler's striped treats.

But the story of the Mexican candy cane isn't your typical tale of American manufacturers chasing lower wages throughout the globe. It has less to do with the cost of labor, and more with the expense of sugar.

Because federal tariffs and subsidies push the price of U.S. sugar far above what it fetches on the world market, candy cane makers like Spangler are opening factories overseas, where sugar costs 6 cents a pound. Domestically, the same amount rings in at 21 cents.

In Bryan - a town so tied to Spangler that residents couldn't run into the former mayor without him pulling a locally made candy from his pocket for them - the move overseas was painful.

"People think you just very quickly decide to go to Mexico and make candy canes down there. It's a very hard, horrible decision," said Dean Spangler, the third generation of Spanglers to run the firm.

When Dean Spangler took over the company in 2000, he inherited a nearly 100-year-old firm struggling with the pressures imposed by mass merchandisers such as Wal-Mart Stores Inc. Candy canes were selling for less than what they cost 25 years before.

Spangler, which also makes the Dum Dum lollipop, concluded that in order to remain competitive it would move production of its basic red-and-white canes to Mexico. But it would also maintain 150 candy cane jobs in Bryan with a new line of higher-priced, exotic flavors. The Ohio plant now produces, among others, strawberry-kiwi, raspberry, buttered popcorn, bubble gum and cinnamon canes.

Even so, many workers in Bryan were upset with the move.

Take Sonya Hughes, a 31-year-old cane spinner whose ties to Spangler run deep in the family. Hughes' mother, Barb, worked at the company before Hughes was born. Two cousins also held jobs there. And it was on the candy cane line that Hughes met her husband, Terry, more than 12 years ago.

Hughes lives in a candy cane family. All three of her kids nag her to bring the treats home. Two of them hope to follow in her steps to work at Spangler.

"When they said they were opening a plant in Mexico, it was very hard," Hughes said. "Spangler is such a family-oriented company and we always thought our jobs would be there for our kids. But when they started making candy canes in Mexico, the new jobs went there."

The Mexico plant put Spangler in the company of other major manufacturers, including Spangler's main competitor, Bob's Candy, based in Albany, Ga., which produces half of its candy canes south of the border.

Other makers of hard candy have followed a similar pattern, at least in part because hard candy, unlike chocolates which can use corn syrup substitutes, is so sugar-intensive.

In Chicago, for example, Brach's Confections will shut its plant next year, forcing roughly 1,000 workers out of their jobs. The center of the U.S. confection business, the Chicago area has lost 3,000 candy-related jobs since 1998.

But during the holiday season, candy canes are the main focus.

No one can quite put a finger on why the striped treats are such a distinctly American tradition.

According to one legend, worshipers at a German cathedral first began handing out candy sticks - shaped in the form of a shepherd's crook - in the 17th century. But it wasn't until the 1900s, in the United States, that the red-and-white striped candy, flavored with peppermint, became standard Christmas tree ornamentation.

Today, just half of the 1.8 billion canes made each year are actually eaten, people in the industry estimate. The rest go to purely decorative uses.

The central difficulty of the candy cane business came under scrutiny this month as the sugar industry found itself in the hot seat.

The Central American Free Trade Agreement, which was negotiated last week, allows Central American countries to double the amount of duty-free sugar they sell in the U.S. market. But the treaty first has to be ratified by Congress, an uncertain prospect with lawmakers from agricultural states sitting on key committees.

For the candy industry, the inclusion of sugar in the negotiations was a rare victory.

"We're hopeful that trade negotiators are starting to realize how harmful it is to protect one agricultural lobby so heavily," said Steve Lodge, vice president of legislative affairs for the National Confectioners Association.

But for backers of current policy, the talks represented a setback. "We would welcome the opportunity to compete globally if there were a level playing field," said Jack Roney, director of economics and policy at the American Sugar Alliance, which represents growers. "Sugar is dumped on the world market."

The Chicago Tribune is a Tribune Publishing newspaper.

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