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New sucralose supplier enters European market today

By Lindsey Partos , 27-May-2008

Food makers to see alternative supplies for sucralose as new manufacturer for this booming sweetener hits European markets for the first time, launching today in Amsterdam.

Spearing a slice of the €41 million European sucralose market, Dublin and Geneva-based Fusion Nutraceuticals, in partnership with Indian pharmaceutical company Alkem, are targeting industrial ingredient use for their IP validated sucralose, rolling the product out at this week's private label PLMA trade exhibition. Any moves to enter the market for this popular sweetener represent a potential legal minefield, as UK ingredients and sugar firm Tate & Lyle, which designed sucralose in the 1970s, holds a swathe of patents. But Fusion Nutraceuticals is confident its product does not infringe on any patents. "We are using purely expired IP for the manufacture of sucralose," Shane Delaney, CEO at Fusion Nutraceuticals told today. "We have gone through significant hoops on the patents and IP, we have been very careful and respectful of Tate & Lyle, and we have a clear IP position," he added. The Fusion Nutraceuticals and Alkem partnership will bring up to 200 tonnes online (full capacity) of their SucraPlus brand, produced by Alkem's new plant, marking competition for Tate & Lyle, that has so far held a monopoly of the lucrative global sucralose market with its Splenda brand product. However, the catalyst for this new market player is the arrival of generics, as certain patents from Tate & Lyle reach expiry and open up competition. Arguably, the threat for Tate & Lyle is not unexpected, but has been looming on the horizon for several years. In 2005 reported on warnings from financial analysts about the pressure of generics on Tate & Lyle's performance. "It is virtually impossible to patent a food: ultimately generics will destroy the pricing structure," a London food analyst told at the time, as important expiry dates in 2006 and 2009 for patents from Tate & Lyle drive competitors to the market. But Tate & Lyle responded confidently to news of the launch today. "We believe the Alkem's plant is based on first-generation technology - while our plants are third generation. This sets the context against which you should view this small scale manufacturing facility," a spokesperson for the UK firm told "We have always said that scaling up the manufacturing process is the issue," she added. Companies that operate on a small scale will quickly find there is an ever burgeoning gap between breaking into the market and consistently supplying good quality product, that meets the stringent requirements of the regulatory agencies, to some of the world's most discerning customers, continued the firm. However, if viable competition does emerge, at some point in the future market economics will start to put downward pressure on prices for the ingredient. A state of play already reflected elsewhere in the sweetener marketplace. According to market researcher Freedonia, overall sweetener prices are forecast to see erosion, following an increased dynamism in the sweetener industry, which is currently seeing a number of new options available after years of relative stability. In 2006 revealed that another Indian firm claimed to be well on the way to producing sucralose. Pharmed Medicare said it had developed an alternative process for the production of the sweetener, with plans to enter the global sucralose table-top market in 2007 with the completion of a 60 ton/year factory. The firm also claimed to have plans to construct a 1000 ton/year facility to produce sucralose as an ingredient for the food and beverage industry.

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