If Splenda is made from sugar, won’t the sugar industry continue to benefit from sales of it because they are providing the crucial input? Clearly they are unlikely to get paid as much per pound for sugar as an input as at retail, so in order for their profits to stay up Splenda’s growth rate would have to be quite large.
So I have a couple of industrial organization questions. Where does Splenda get its sucrose? Are they vertically integrated, or do they contract with beet and/or cane farmers to buy bulk sugar? Do they buy it domestically (I suspect they do), or internationally?
My policy question is this: will the combination of technological change (making Splenda possible) and the high popularity of Splenda contribute to the demise of this insupportable protectionism?