Tate & Lyle alerted to potential sucralose competitor
branded as Altern in a small number of Wal-Mart stores in the US
has attracted the attention of Tate & Lyle.
Altern is described as containing sucralose. Tate & Lyle, which holds the patent to the sucralose product Splenda, has analysed samples of this product and believes it to contain an active ingredient of Chinese origin.
The UK-based ingredient firm says that work is now being carried out to determine if this ingredient meets the stringent US Food and Drug Administration specifications and / or infringes on Tate & Lyle's intellectual property.
Patent protection of Tate & Lyle's sucralose product Splenda is absolutely central to the firms success. Profits of 33 million from the firm's Splenda business were 7 million higher than in the comparative period for 2004, contributing significantly to a net income in the six months to 30 September of 94 million, up from 59 million a year earlier.
Tate & Lyle filed the original product sucralose patent in 1976. This recently expired, opening the product up to competitors, though the company remains confident in the strength of its process patents.
Last year the market believed stiff competition was already in place when it emerged that the world's number one retailer Wal-Mart was selling an alternative to Tate & Lyle's zero calorie sweetener, Splenda, at a 30 per cent discount.
However, the UK company soon discovered that Altern product was in fact a direct copy of Splenda, which it had supplied to a manufacturing customer who had then sold it to the US retail giant.
Tate & Lyle claims it is not worried by recent developments. It says that the quantity of sucralose required for a single table-top product such as Altern is extremely small and the supply of sucralose to the table-top sector is a minor part of Tate & Lyle's Splenda Sucralose ingredients business.
The company says that it does not expect the launch of this product, even were it to be on a national scale, to have any material effect on the results of its sucralose division.
It is understandable that the firm would take an interest in this development however. The sweeteners market is very attractive. Sectoral growth is pitched at about 8.3 per cent year on year until 2008, far out-pacing food industry growth currently pegged at around three to four per cent.
And with consumers increasingly turning towards sugar-free and low-calorie products, food makers are increasingly on the lookout for cheap sugar alternatives.
Such demand has been highly lucrative for Tate & Lyle. Sales of sucralose, a sugar-derivative that is 600 times sweeter, helped the company to recently record a first-half profit increase of 59 per cent.
