Did Congress kill the Twinkie? The tariff tale behind the Hostess demise.(+video)
Since 1934, Congress has supported sugar trade tariffs. In a sign of the power of the sugar lobby, Hostess picked unions, not the lobby, to fight when it had to cut costs to stay in business.
It’s the end of a lunchbox era as baked icons such as Twinkies, Hostess CupCakes, and Wonder bread face extinction amid a contentious labor dispute, which ended Friday in the declared liquidation of Hostess Brands Inc., the Texas-based confectioner.
So far, Big Labor has gotten the brunt of criticism for the demise of Hostess, since the Bakery, Confectionery, Tobacco Workers ,and Grain Millers union refused, despite warnings from fellow union heads, to return from strike at some 20 facilities nationwide. That forced CEO Gregory Rayburn to declare, after two rounds of bankruptcy proceedings, that “it’s over.”
Yet as the political recriminations echo amid news of 18,500 lost jobs in an already sluggish economy, some economists suggest that Americans shift their blame from Big Labor to the role Congress might have played in writing the Twinkies’ obituary.
And that, economists say, may come down to one sweet little word: sugar.
Since 1934, Congress has supported tariffs that benefit primarily a few handful of powerful Florida families while forcing US confectioners to pay nearly twice the global market price for sugar.
One telling event: When Hostess had to cut costs to stay in business, it picked unions, not the sugar lobby, to fight.