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Salada court application against JACRA denied

Published:Monday | November 16, 2020 | 12:16 PMKarena Bennett - Business Reporter
Salada Foods Jamaica's flagship coffee, Jamaica Mountain Peak.
Salada Foods Jamaica's flagship coffee, Jamaica Mountain Peak.

Coffee processor Salada Foods Jamaica Limited's legal bid to overturn directives from the Jamaica Commodities Regulatory Authority, JACRA, regarding its coffee quota has been denied by the Supreme Court.

Justice Nembhard, who delivered the ruling on Friday, also refused permission to Salada to appeal the decision.

The company has been fighting a directive to increase the content of Jamaican-grown coffee beans in the formulation of its products, saying the more expensive local coffee would drive up costs and impact the taste profile of its flagship Jamaica Mountain Coffee instant blend.

The judgment comes after a two-year-long battle between Salada and JACRA over fees and quotas. Their dispute escalated over the summer when JACRA directed Salada on August 11 to revert to the 30 per cent local content in its instant coffee formulation, starting September 1, upon expiration of a waiver the coffee producer was granted in 2019.

JACRA defended the timing of its decision, saying developments in the industry, including the impact of COVID-19, have left small coffee farmers sitting on significant inventory of non-exportable Jamaican coffee.

But Salada, which noted that it, too, was facing a fallout in sales from the pandemic, turned to the courts to quash or cancel the JACRA decision after failed meetings with the commodities regulator and Ministry of Agriculture.

The court case, which ran for roughly two months, saw Salada’s lawyers presenting arguments around whether instant coffee would apply to Section 19 of the JACRA Regulations, which requires coffee producers to include 30 per cent local coffee content in their coffee formulations; whether JACRA had overstepped its authority; and whether the commodities regulator had fulfilled its duties in relation to the import permits to the company, which is the sole processor of instant coffee in Jamaica.

The court held that Section 19 of the JACRA regulations – around which the dispute revolved – was not ultra vires or beyond the regulator's powers, having determined that Section 37 of the JACRA Act allowed for its creation. Justice Nembhard also ruled that instant coffee, being a derivative of roasted coffee, is captured by the definitions provided.

“Therefore, Section 19 of the JACRA Regulations applies to Salada,” said JACRA in a press release about the ruling.

In relation to import permits, the court found that JACRA had fulfilled its duties, which are only to provide advice to the agriculture minister. Justice Nembhard’s written judgment is to be distributed electronically in a week.

karena.bennett@gleanerjm.com