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30 August 2016
Europe/United Kingdom

Equity Research

Food Retail

Pricing: Rarely as it seems

Research Analysts

THEME

Stewart McGuire, CFA

44 20 7888 6531 [email protected]

An in-depth look at UK pricing and inflation

Dusan Milosavljevic

44 20 7888 7751 [email protected]

We have undertaken a broad analysis on product pricing and sourcing. Our goal is twofold: address many of the inherent flaws found within traditional pricing surveys, and contribute hard data to the ongoing debate regarding inflation after recent sterling weakness.

Specialist Sales: Lindsay Ireland

44 20 7883 6895 [email protected]

Our analysis reveals the following:

■ We expect almost no impact from sterling devaluation: UK own label

sourcing falls within a narrow range of 63% to 75% amongst the 7 major food retailers. These differences would narrow further once branded goods and non-food items are factored into the overall assortment.

■ Sterling weakness is unlikely to affect Aldi / Lidl growth: Both Aldi and

Lidl are naturally hedged due to their British-based sourcing. Overall, both retailers came in slightly below the group average for UK sourcing, but both were in the top 3 in the important Meat and Produce categories.

■ Tesco appears most at risk from rising import costs: Tesco scored

lowest on our UK-sourcing basket at 63% vs. the group average of 71%. However, Tesco is naturally hedged from sterling weakness due to its international operations (22% of group sales, 29% of EBIT).

■ The convenience premium is much higher than anticipated: Tesco and

Sainsbury convenience store prices were between 4.4% and 8.7% higher than their supermarket prices. Furthermore, we see Sainsbury following a sophisticated pricing strategy that results in prices ~3% higher than Tesco.

■ Own brands remain a key battleground: Tesco's Farm Brands category

is now the price leader at the low end, and we have seen little response from the competition. At the high-end, own brands are driving margin, with prices 3x more expensive than the cheapest own brand products.

■ Aldi and Lidl differentiation should concern competitors: Aldi's focus

on own label gives it clear price leadership; Lidl's brand-heavy assortment places it below the mainstream grocers in pricing while offering a more complete assortment.

■ Potential Asda price cuts still overhang the sector: Our analysis shows

Asda has lost its price leadership credentials. Poor performance and the recent CEO change suggest a tactical shift, at least. While price cuts may not regain material market share, collateral damage could be high.

■ National pricing remains firmly in place: We found strong evidence of

national pricing across all retailers. We believe that regional pricing is the single most compelling strategic option available to the retailers, which has been proven effective by the French peers.

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit

Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

30 August 2016

Key Charts

  • Figure 1: UK own-label sourcing heat map
  • Figure 2: Supermarket vs. convenience premiums

£92.00 £90.00 £88.00 £86.00 £84.00 £82.00 £80.00 £78.00 £76.00

Category

Produce

  • TSCO SBRY
  • MRW

34% 53% 37% 74% 88% 73% 90%

Asda

23% 58% 78% 74% 81% 91% 100% 91%

71%

  • WR
  • Aldi

42% 29% 54% 0%

Lidl

40% 6%

+2.7%

37% 61% 64% 80% 42% 34% 80%
20% 76% 51% 80% 81% 100% 98%
45% 76% 66% 80% 54% 73% 93%
Beverages Dry/Canned Hhld/Pers Care Dairy

+8.7%

50% 72% 62% 71% 93% 62%

67%

+4.4%

79% 80% 89%
Frozen Meat Bread / Bakery

Overall

100% 100% 100%

63% 76% 75%

100% 100%

76% 67%

  • Sainsbury's
  • Tesco

Superstore

  • Tesco Express
  • Sainsbury's

Local

  • Co-op
  • Waitrose
  • Little Waitrose

  • Source: Credit Suisse research
  • Source: Credit Suisse research

Figure 3: Tesco convenience vs. supermarket prices Figure 4: High-end own brand premiums

£25 £20 £15 £10
£5

25% 20% 15% 10%
5%

+1.9x
+3.4x

Tesco: 16 items with no premium vs. supermarket

+3.1x

  • +3.0x
  • +3.0x

£0
Low End High End Low End High End Low End High End Low End High End Low End High End
Tesco Sainsbury's Asda Waitrose Morrisons

0%

  • Source: Credit Suisse research
  • Source: Credit Suisse research

  • Figure 5: Large price gap, unchanged over time
  • Figure 6: CPI and PPI trends

23% 22% 21% 20% 19% 18% 17% 16% 15% 14%
£1.45

  • 900
  • 15%

10% 5%

Price Gap (LHS)

implied GM impact (bps, LHS) Food CPI (3m-MA)

Big 4 average price (RHS) Discounter average price (RHS)

£1.40 £1.35 £1.30 £1.25 £1.20 £1.15 £1.10 £1.05 £1.00

Food PPI (3m-MA)
600

300

  • 0
  • 0%

  • -300
  • -5%

  • -10%
  • -600

  • Jan 11
  • Jan 12
  • Jan 13
  • Jan 14
  • Jan 15
  • Jan 16

  • Nov 2013
  • Jul 2014
  • Mar 2015
  • Dec 2015
  • Aug 2016

  • Source: Kantar Worldpanel
  • Source: ONS, Credit Suisse research

Pricing: Rarely as it seems

2

30 August 2016

Introduction

Numerous issues make relevant and accurate pricing analysis challenging, such as whether to price whole baskets vs. individual items, how to match products against each other (especially own brands, but also size and quality differentials), the relative importance of high-volume vs. low-volume items, and whether to (and how to) include price-matching schemes and promotions. There are also significant gaps in understanding pricing differentials between store formats, own label pricing and overall pricing strategy. Further difficulties arise when trying to incorporate the fickle nature of consumers who can (and do) change purchasing decisions mid-shop, reducing the value of using a fixed list of products at set quantities.

With respect to sourcing, many products are sourced from multiple countries and sources may change seasonally. Mix effects, contract terms and potential currency hedging programs introduce further uncertainties when drawing conclusions regarding the impact of currency moves.

To try to overcome some of these pitfalls, we accounted for several of the more obvious inconsistencies, such as matching goods in discounters against supermarket equivalents, normalising quantity sizes and carefully considering what products go into baskets, leading us to construct multiple baskets. Our goal was to address the following questions:

 Are there geographic pricing differences?  For a large basket of staples, how do prices compare?  What are the price differences between store formats?  Does pricing variance change between product categories?  How does our pricing compare to existing 3rd-party surveys?  Where does Tesco's Farm Brands fit within competitors' own label?  How do entry-level and high-end own label prices compare?  How will cost of goods change based on product origins?

Methodology

One size does not fit all. We constructed 7 different, purpose-built baskets: (i) a large, "weekly shop" basket with 37 staple food items; (ii) a 41-item basket that covers key convenience items; (iii) a 20-item beer and wine basket; (iv) an own label basket focused on premium products; (v) a head-to-head basket for selected Tesco Farm Brands vs. lowest-priced competition; (vi) an "infrequent items" basket that we used to supplement our national pricing thesis; and (vii) an "origin" baskets that contains a high level of "imported" and Farm Brands goods.

We tested the various baskets across 7 supermarkets and 2 online retailers, pricing the baskets on the same day with the same items and quantities. To test national pricing, we selected towns from the top and bottom earnings quartiles that were in close proximity to each other so we could survey all prices in a single day, minimising the chance for intraday price variation.

Both actual and unit prices were recorded, which enabled us to normalise the data after the fact, facilitating basket comparison between retailers. Test shops were carried out to ensure the validity of the baskets and to ensure the logistics were feasible.

Before we could embark on our analysis, we also needed to determine whether prices were actually stable across the entire store network. After parsing the data and seeing no variation in prices for either mainstream or lower-volume goods, we are convinced that national pricing still exists (see Appendix A for a full breakdown of our national pricing methodology). We maintain that regional or store-level pricing is the single-most compelling strategic option available to the retailers, which has been proven effective by the French peers in halting the expansion of hard discounters and in supporting margins, which remain materially higher than UK margins.

Pricing: Rarely as it seems

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30 August 2016

Part I: Pricing analysis

The large basket

We expected few surprises from the traditional "weekly shop" basket. We recognise that it is the basket with the highest potential for sampling error given the very broad assortment of goods found in a weekly shop compared to the small number of samples. That potential for sampling error is one of the reasons why we like the time series data published by the Grocer trade magazine – a different basket each week and the ability to smooth the data.

However, we felt there was still value in this shop even if we expected few variations from our usual data sources: it acts as a check to our current views, we can gather a more complete sector snapshot (the Grocer survey only shops 5 grocers consistently; we are shopping in 9 locations), and we could control the shop, which is important when item comparisons / substitutions are needed.

Figure 7: The large basket constituents

Beverages Pepsi (2L)

Own Label Bottled Water (2L)

Meat

Own Label Large Whole Chicken (1.5-2kg) Own Label Chicken Breasts (500-750g) Own Label Salmon Fillet (240-270g) Own Label Bacon (300g) Own Label Beef Mince 20% Fat (500g) Own Label Oranges (5 pack)
Own Label Orange Juice (1L)

Bread / Bakery

Own Label Plain Tortilla Wraps (8 pack) Hovis Soft White Medium Bread (800g) Own Label Plain Flour (1.5kg)

Produce

Own Label Milk Chocolate Cookies (5 pack) Heinz Tomato Ketchup (570g) Nescafe Gold Instant Coffee (200g) Own Label Semi Skimmed Milk (4 Pints) Own Label Grated Cheese (250g)
Own Label Bananas (5 pack)

Cans / Jars Dairy

Own Label Baby Plum Tomatoes (250-350g) Own Label White Potatoes (2.5kg) Own Label Apples (5 pack) Own Label Onions (1kg)
Lurpak Slightly Salted Spreadable (500g) Own Label Cheese Pizza (250-300g) Ben and Jerry's Caramel Chew Chew (500ml) Own Label Vanilla Ice Cream (900ml / 1L) Finish Quantum Max Powerball Tablets (30 pack) Persil Small And Mighty Bio. 40 Wash (1.4l) Sure Women Deodorant Compressed (125ml) Head and Shoulders 2in1 Classic (225ml)
Own Label Cucumber Medium Sized (1) Own Label Carrots (1kg)

Chilled

Own Label Strawberries (400g) Cadbury Dairy Milk Chocolate Bar (200g) Walkers Ready Salted Crisps (6 x 25g) Own Label Tea Bags (80 pack) Own Label Corn Flakes (500g)

Dry

  • Goods
  • Cleaning

Personal Care

Source: Credit Suisse research

At first glance, the results are largely as expected: the Big 4 are grouped relatively closely together, Waitrose and Ocado are at the high end, and Aldi and Lidl are at the low end.

However, there were a number of interesting observations to come out of the data. Firstly, Tesco was slightly, but discernably, above its major competitors1,2. We believe that was due to some of the own brands choices we needed to make to align with similar pack sizes; with more flexibility, a few more of its entry-level Farm Brands products would have been included, which would have lowered the overall basket price.

Second, Aldi is by far the most restrictive in terms of branded goods. Out of the twelve branded items in our basket, Aldi stocked only three3. Overall, Aldi was cheaper than the Big 4 average by 22% (Figure 8). A significant part of this differential was due to the benchmarking of own label products against branded goods4. The remaining 28 exactlymatched items were cheaper than the Big 4 average, by 11% – coincidentally, exactly the

1 Highlighting the difficulties in comparison pricing, we did not always use Tesco's entry-level Farm Brands products in our test because the products did not always meet the size or product parameters of our list. Had we used Farm Brands whenever possible, the basket price would have been £78.01, shown by the solid bar in the graph in Figure 8 – still higher than the other Big 4 competitors. The actual comparable basket was £79.06, and is shown with the hatched area.
2 Our "infrequent items" basket was shopped at Tesco and Sainsbury supermarkets as part of our national pricing analysis. If we were to add those items (listed in Appendix A) to our Tesco and Sainsbury supermarket baskets, Tesco's basket price premium to Sainsbury would have fallen from +4.1% to +1.7%, implying that Sainsbury attempts to price more infrequently purchased items at a premium.
3 The three branded items in our basket stocked by Aldi were Pepsi cola, Hovis bread and Nescafé coffee. 4 Aldi was 34% cheaper on average on the 9 own label items that were benchmarked against branded items.

Pricing: Rarely as it seems

4

30 August 2016

same difference as Lidl's identically-matched basket. And while we often group Aldi and Lidl together as "discounters", Lidl is materially differentiated against Aldi. There were no own label substitutions for branded goods at Lidl.

Figure 8: Large basket pricing: Surprises beneath the headline numbers

£95.00 £90.00 £85.00 £80.00 £75.00

  • (11%)
  • (22%)

£70.00 £65.00 £60.00 £55.00

  • Aldi
  • Lidl
  • Morrisons Sainsbury's
  • Asda
  • Tesco
  • Amazon
  • Ocado
  • Waitrose

Source: Credit Suisse research

Third, at the other end of the spectrum, Waitrose was the most expensive food retailer across absolute and normalised data, with consumers paying a premium of 21% per item versus industry average, and +18% at the basket level. But these statistics mask a relatively sophisticated pricing strategy. Across the ten most competitively priced items Waitrose was only 5.1% more expensive than the market; across the rest of the basket this rose to 27% with a premium of 33% in the last ten items. In contrast, Tesco, Sainsbury’s, Asda, Aldi and Morrisons all kept very stable positions across the basket with their prices, not showing any trends relative to the competitiveness of each item.

Finally, the pricing for Amazon was merely in line with the Big 4; we had expected it to be lower, similar to their Amazon Pantry price positioning. It is possible that Amazon is benchmarking off Ocado pricing, which had a premium of 16%5. We also suspect that Amazon wants to grow its footprint methodically, to ensure service quality.

Item pricing vs. basket pricing

In order to establish more comprehensive insights we analysed item prices through the basket by focussing on item price variation. Figure 9 shows the variance from the mean6 for each item, with keenly-contested items on the left-hand side of the chart, and lesscontested items on the right-hand side.

5 Since 2014, The Grocer has included Ocado 7 times in the weekly shop, with an average premium to the Big 4 of 11%. 6 Variance score = [Average (Abs. Value (Pstore – Pavg))] / Pavg

Pricing: Rarely as it seems

5

30 August 2016

Figure 9: Variance from average price (all 9 retailers)

60% 50%

  • More competitive
  • Less competitive

40% 30% 20% 10%
0%

Source: Credit Suisse research

When we saw the range of items, we were curious as to whether there was any pattern to the types of goods that would be highly contested (milk made sense; we were less sure about cucumbers) and those that would be less contested. We decided to expand our basket to a large sample of items taken from The Grocer. The full list of 330 products can be found in Appendix C, grouped by variance. We did not, unfortunately, find a compelling pattern for their grouping.

Figure 10: Broad-based variance: 330 items (Big 4 retailers)

0.35
0.3

  • More competitive
  • Less competitive

0.25
0.2
0.15
0.1
0.05
0

  • 1
  • 330

Number of Products

Source: The Grocer, Credit Suisse research

Pricing: Rarely as it seems

6

30 August 2016

Finally, we overlaid our large-basket shop onto our usual weekly basket pricing chart.

Figure 11: Relative pricing time series, with our benchmarking at RHS

Waitrose Ocado

116% 112% 108% 104% 100%
96%

Tesco Asda Amazon Sainsbury Morrisons

92%
Aldi, Lidl >20%

Lidl

88% 84% 80% 76% 72% cheaper

Asda Sainsbury Waitrose
Morrisons Tesco

• 4-week moving averages • Weekly basket avg. excl. Waitrose

• Aldi / Lidl benchmarked infrequently

Aldi
Lidl

Aldi

  • Apr 2014
  • Jul 2014
  • Oct 2014
  • Jan 2015
  • Apr 2015
  • Jul 2015
  • Oct 2015
  • Jan 2016
  • Apr 2016
  • Jul 2016

Source: The Grocer, Credit Suisse research

The own label basket: High variability

Of the 25 own label items that were part of our family basket, Aldi and Lidl were shown to be the cheapest on 17 of them. Own brands have proven to be such a fundamental part of recent food retail strategy that Tesco's most significant initiative recently has been the launch of its Farm Brands category. As noted, we did not always use Farm Brands in our family basket because items did not always meet the size or product parameters of our list. We decided to re-test the own label basket, using Tesco's Farm Brands as the starting point, choosing two items from each of Tesco's "farms".

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    The effects of artificial and natural sweeteners on various physiological systems By Farzana Rahiman Thesis submitted in fulfillment of the requirements for the degree of (PhD) Doctor of Philosophy in Science at the University of the Western Cape May 2011 Supervisor: Prof E.J Pool Co-supervisor: Prof. J.A Klaasen Abstract The effect of artificial and natural sweeteners on various physiological systems Farzana Rahiman Department of Medical Biosciences, University of the Western Cape Key words: Artificial sweeteners, natural sweeteners, sugar cane molasses, immune system, male reproductive system, female reproductive system This study aimed to investigate the effects of commercially available natural (sugar cane molasses, white sugar and brown sugar) and artificial (Canderel™, Equal™, Natreen™, Sweetex™, Splenda™ and Swheet™) sweeteners on various physiological systems. The artificial sweeteners tested in this study may be categorised into their respective groups based on their primary ingredient. The brands Canderel™ and Equal™ contain aspartame, Natreen™ and Sweetex™ consist of saccharin and Splenda™ and Swheet™ are composed of sucralose. The inclusion of artificial or natural sweeteners in the human diet has been continually debated and their implication in the development of certain diseases has raised concern regarding their safe use. Therefore, it is necessary that these food products be subjected to a battery of tests to determine adverse effects on human health. Firstly, we investigated the effect of the popular sweetener, sugar cane molasses on the immune system. Whole blood cultures were used to assess the impact of molasses on cytokines regulating specific immune pathways. Lactate dehydrogenase activity was used to determine potential cytotoxicity of sugar cane molasses.
  • WHAT IS ASPARTAME? and Their Juices

    WHAT IS ASPARTAME? and Their Juices

    ASPARTAME WHAT IS ASPARTAME? and their juices. The amount of in foods that require baking for a long methanol resulting from consuming time because prolonged exposure to Aspartame is a low-calorie an aspartame-sweetened beverage is high temperatures can cause it to lose sweetener that has been used for about five to six times less than that its sweetness. decades as a way to lower one’s intake resulting from the same volume of of added sugars while still providing tomato juice.1 satisfaction from enjoying something Aspartame can be used as an BY THE INTERNATIONAL FOOD INFORMATION COUNCIL sweet. Aspartame is about 200 times ingredient in beverages (such as diet sweeter than sugar, and as such only sodas, light or low-sugar juices and a small amount of the sweetener flavored waters), dairy products (such is needed to match the sweetness as light yogurt and low-fat flavored provided by sugar. In tabletop packets milk), nutrition bars, desserts (such and prepared foods and beverages, as sugar-free puddings and gelatins, aspartame is often blended with other light ice cream and popsicles), sweeteners or food components to chewing gum, sauces, syrups and minimize bitter flavors and enhance condiments. Aspartame is also found overall taste. in several types of low-calorie tabletop Aspartame consists of two amino sweeteners. The most common brand acids—aspartic acid and phenylalanine. of aspartame tabletop sweetener When ingested, aspartame is broken in the U.S. is Equal®. Brands outside down into these amino acids for use the U.S. include Canderel® (found in in protein synthesis and metabolism.
  • Memorandum and Order March 2, 2007

    Memorandum and Order March 2, 2007

    Case 2:04-cv-05504-GP Document 152 Filed 03/02/07 Page 1 of 64 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA MERISANT COMPANY, : CIVIL ACTION Plaintiff, : : vs. : : McNEIL NUTRITIONALS, LLC, AND : McNEIL-PPC, INC. : : Defendants. : NO. 04-5504 Gene E.K. Pratter, J. Memorandum and Order March 2, 2007 Merisant Company, Inc. (“Merisant”) alleges that McNeil Nutritionals, LLC and McNeil- PPC, Inc. engaged in false and misleading advertising in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125, and in violation of the Pennsylvania common law of unfair competition. The parties have engaged in extensive discovery activities, leading to their submission of various summary judgment motions as well as dueling Daubert motions. Specifically, the McNeil parties have filed a motion for summary judgment, and Merisant moves for partial summary judgment seeking to preclude McNeil from presenting an affirmative defense of “unclean hands.” In addition, Merisant and McNeil have each filed a motion alleging that testimony from one or more of the opposing party’s expert witnesses is inadmissible under Rule 702 of the Federal Rules of Evidence and pursuant to Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993), and its progeny. McNeil filed a motion to exclude the testimony of Dr. James Fisher, and Merisant filed a motion to exclude the Case 2:04-cv-05504-GP Document 152 Filed 03/02/07 Page 2 of 64 testimony of Dr. Steven Munger.1 For the reasons detailed below, the Merisant motion concerning the unclean hands defense will be granted; the remainder of these specific motions will be denied.
  • Low Calorie Sweeteners: Roles and Benefits

    Low Calorie Sweeteners: Roles and Benefits

    Low Calorie Sweeteners: Roles and Benefits Version • September 2013 Introduction This booklet has been developed for Low calorie sweeteners are ingredients used in a growing number of foods and drinks, both in Europe and globally. As healthcare professionals and is designed humans, we have an innate preference for sweet taste. However, with food plentiful in developed countries and more people to provide factual information on low leading sedentary lifestyles, this preference for sweetness is something we need to manage more effectively than ever calorie sweeteners, their characteristics, before. High obesity rates show that more people need to the evidence supporting their safety and focus on active, healthy lifestyles and energy balance – that is, balancing the calories consumed with the calories burned how they can help manage calorie intake. through physical activity. The health and financial impacts of treating obesity are a cause for concern. In recent years there has It is based on publicly available science, been a steady and significant increase in consumer demand for low calorie products. As a result there is growing interest among healthcare professionals and the general public to learn more about low calorie sweeteners, the foods and drinks in which they are found, how they help to reduce calorie with references and contributions from intake and contribute to weight management and improved overall health. internationally recognised experts. Some individuals have claimed that the consumption of one low calorie sweetener in particular, aspartame, is linked to various adverse health effects. These claims have sometimes been amplified by the media, raising concern among some consumers. Numerous regulatory bodies worldwide, including the European Food Safety Authority (EFSA), have reviewed the extensive science about aspartame and all have concluded these claims are without substance and that it is a safe food ingredient.
  • Impacto De La Sustitución Del Azúcar De Caña Por Edulcorantes De Alta Intensidad En México Signatura

    Impacto De La Sustitución Del Azúcar De Caña Por Edulcorantes De Alta Intensidad En México Signatura

    Impacto de la sustitución del azúcar de caña por edulcorantes de alta intensidad en México alta intensidad de caña por edulcorantes azúcar de la sustitución del de Impacto Impacto de la sustitución En México, la estructura del mercado de los edulcorantes cambió con la puesta en marcha del Tratado de Libre Comercio de América del Norte (TLCAN), deto- del azúcar de caña por nando la importación de jarabes de maíz de alta fructosa (JMAF) y colocando parte de los excedentes de azúcar en el mercado norteamericano. A dicha sustitución de azúcar por JMAF se le sumó el incremento del consumo de edul- edulcorantes de alta corantes de alta intensidad. Además, existe una gran cantidad de productos comerciales comestibles que incorporan en su formulación edulcorantes intensidad en México diferentes del azúcar, aprovechando que las personas buscan consumir menos calorías. Sin embargo, las normas de etiquetado no especican con claridad el tipo de edulcorante usado ni los posibles riesgos a la salud que implica su Alberto Santillán Fernández consumo. Cabe señalar que la agroindustria cañera en México enfrenta una Luis Ramiro García Chávez competencia desleal al estar sometida bajo grandes campañas que buscan Nehemías Vásquez Bautista reducir el consumo de azúcar, vinculado éste a los problemas de obesidad y Vinicio Horacio Santoyo Cortés dejando de lado los riesgos que conlleva el consumo de edulcorantes de alta intensidad. En este libro se analiza dicha problemática y se proponen alternati- Mario Melgar Morales vas para enfrentar los efectos de la sustitución de azúcar de caña por otros Willian Pereira edulcorantes. De no existir una estrategia en ese sentido, es posible que la Jesús Eliecer Larrahondo Aguilar industria azucarera siga perdiendo mercado nacional, y al contraerse, se afec- Agustín Merino García ten miles de empleos por el cierre de ingenios.