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Supreme Court rejects Salada’s judicial review plea

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Supreme Court rejects Salada’s judicial review plea

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Tuesday, November 17, 2020

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The Supreme Court has rejected leading coffee company Salada Foods Jamaica’s application for leave to apply for a judicial review, and permission to appeal an order from the Jamaica Agricultural Commodities Regulatory Authority (JACRA) to increase local coffee content in its instant products.

In its ruling handed down last Friday, the court required that Salada Foods adjust its formulation of instant coffee from 10 per cent local coffee content to 30 per cent, as required by JACRA. Salada had resisted the order, claiming that it would only serve to reduce its local market, which depends on cheaper instant coffee.

Judgement in the matter was delivered by Justice Anne Marie Nembhard. The issues that the court decided on were: whether Salada has an arguable case; whether JACRA acted ultra vires in the performance of its duties; whether a legitimate expectation was created on behalf of Salada; whether JACRA has the authority or power to grant waivers; whether instant coffee was so transformed that section 19 of the JACRA regulations did not apply to it; whether JACRA had fulfilled its duties in relation to import permits; and whether there was an alternative remedy that Salada should have considered.

The court held that JACRA does not have the power to grant any waiver to Salada, as JACRA’s powers are limited to what its statute provides (the JACRA Act and regulations). Therefore, there can be no legitimate expectation of an authority to act outside of its legislation. Additionally, section 19 of the JACRA regulations was not ultra vires, as section 37 of the JACRA Act allowed for its creation.

An analysis of section 2 of the JACRA Act was conducted by Justice Nembhard. It showed that coffee included roasted coffee and coffee blend included a blend of roasted coffee and, as such, instant coffee, being a derivative of roasted coffee, is captured by the definitions provided. Therefore, section 19 of the JACRA regulations also applies to Salada.

In relation to import permits, the court found that JACRA had fulfilled its duties, which are only to provide advice to the minister.

Lastly, with the creation of the Appeals Tribunal, the judge said that Salada had an alternative remedy, which it should have consulted. Consequently, she ruled that leave to apply for judicial review is refused; permission to appeal is refused; and that orders as to cost are reserved.

The dispute between Salada and JACRA over green bean content in local coffee is now over one year old. In March last year, the coffee company and JACRA clashed over rules for the bean content in its products. The instant coffee produced for the local market is primarily made with cheap green bean imports, but JACRA has been insisting on increasing the take-up of local green beans.

Jamaican coffee, a globally recognised commodity, is relatively expensive, while Jamaican green bean sells in the region of US$25 per kilogramme. Imported varieties are retailed for under US$5 per kilogramme.

Salada has insisted that to adopt the formula stipulated by JACRA would make the company unable to compete with cheaper imported instant coffee.

“Unfortunately, JACRA’s edict to change the instant coffee formula will be detrimental to the company’s cost of sales. It will also materially change the taste profile of its Mountain Peak Coffee brand, which currently enjoys over 50 per cent market share of the instant coffee sector, and we are unsure of how receptive consumers will be to this,” Salada said.

It also noted that the Mountain Peak Coffee brand, which currently enjoys over 50 per cent market share in the instant coffee sector, was in an unstable situation in terms of how receptive consumers would be to the change.

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