Tate & Lyle may lose its monopoly on sucralose

Tate & Lyle will be unable to sustain its 40% profit margin and its monopoly on the sucralose market as rivals muscle in on its territory, analysts have predicted.

Panmure Gordon analysts said: "Margins have a long way to fall from their current 40%+ to a normal added value ingredient margin somewhere in the teens."

Meanwhile, rivals said they were ramping up capacity. Ed van Wankum, European commercial director at JK Sucralose, said JK was adding 200t of extra capacity to its 800t/year capacity plant in JiangSu, China, and had "applied for seven production patents in China, and four in the US"

He rejected allegations that JK had copied Tate & Lyle patents.

Rival Chinese supplier Niutang, which claimed its capacity was now "larger than JK Sucralose", also insisted it used "completely different [sucralose production] processes" to Tate & Lyle.

However Indian sucralose supplier BioPlus Life Sciences claimed Chinese firms had infringed both Tate & Lyle's and its own patents. It said: "There's also a huge amount of substandard product on the market. 90% of samples we test fail on quality grounds."