Skip to comments.Did Congress kill the Twinkie? The tariff tale behind the Hostess demise.(+video)
Posted on 11/19/2012 8:12:59 PM PST by grundleEdited on 11/19/2012 8:17:46 PM PST by Admin Moderator. [history]
Since 1934, Congress has supported sugar trade tariffs. In a sign of the power of the sugar lobby, Hostess picked unions, not the lobby, to fight when it had to cut costs to stay in business.
Its the end of a lunchbox era as baked icons such as Twinkies, Hostess CupCakes, and Wonder bread face extinction amid a contentious labor dispute, which ended Friday in the declared liquidation of Hostess Brands Inc., the Texas-based confectioner.
So far, Big Labor has gotten the brunt of criticism for the demise of Hostess, since the Bakery, Confectionery, Tobacco Workers ,and Grain Millers union refused, despite warnings from fellow union heads, to return from strike at some 20 facilities nationwide. That forced CEO Gregory Rayburn to declare, after two rounds of bankruptcy proceedings, that its over.
Yet as the political recriminations echo amid news of 18,500 lost jobs in an already sluggish economy, some economists suggest that Americans shift their blame from Big Labor to the role Congress might have played in writing the Twinkies obituary.
And that, economists say, may come down to one sweet little word: sugar. Since 1934, Congress has supported tariffs that benefit primarily a few handful of powerful Florida families while forcing US confectioners to pay nearly twice the global market price for sugar. One telling event: When Hostess had to cut costs to stay in business, it picked unions, not the sugar lobby, to fight.
These large sugar growers ... are a notoriously powerful lobbying interest in Washington, writes Chris Edwards of the Cato Institute in a 2007 report. Federal supply restrictions have given them monopoly power, and they protect that power by becoming important supporters of presidents, governors, and many members of Congress.
Such power has been good for business in the important swing state of Florida, but it has punished manufacturers who rely on sugar in other parts of the United States, the Commerce Department said in a 2006 report on the impact of sugar prices.
Look for the union label, and that’s why Twinkies aren’t on the table.
Who are these a few, powerful Florida families? Can someone name them?
Sprague, Oxnard, Fanjul
Sugar Families Plan Merger Of Flo-Sun and Savannah - New York Times - July 16, 1997
See too, The Sugar Barons: Family, Corruption, Empire, and War in the West Indies, a book that chronicles the "sugar revolution" that began in the mid 1600's. And see Controversial Florida sugar family contributed to Scott Brown and Democrats alike, which focuses on the Fanjul brothers.
“The unions delivered the final coup de grace, but hostess was on the way down...”
As I understand it, the company had been in bankrupsy twice before this. The union finished off the wounded company.
It’s getting out:
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