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Tate & Lyle Sugars take legal fight to European Commission over sugar rules

By Nathan Gray+

25-Sep-2012

Tate & Lyle Sugars is seeking 75 million euros in damages from the European Commission after what it claims to be the ‘mismanagement’ of the European sugar market.

The UK-based cane sugar refiner and its Portuguese sister company Sidul Açúcares filed the complaint against the EU regulator after claiming that due to EU sugar policy mismanagement its refinery is not at full capacity – placing upward pressure on pricing.

“It is beyond belief that the Commission still claims that its management of the EU sugar market has been a success for consumers and competition, because the facts do not bear this out,” said Ian Bacon, president of Tate & Lyle Sugars.

“Consumers are paying the price of misguided and stubborn policies, and these policies are putting the entire cane refining sector at risk,” he added.

The complaint focuses on the European Commission’s management of the European sugar market during spring and early summer 2012. Two earlier complaints contested the Commission’s decisions impacting the sugar sector in the 2010-11 marketing year and the period November 2011 to January 2012. 

Tate & Lyle Sugars, which is owned by U.S. firm American Sugar Refining, and Sidul Açúcares Unipessoal LDA confirmed that they had filed the third legal action against the European Commission, as published in the EU’s Official Journal (found here ). 

Put together, the three complaints are claiming damages worth €198 million.

Mismanagement

Sugar remains one of the most heavily regulated commodities in the European Union, with domestic sugar beet growers benefiting from national production quotas and fixed prices that are overseen by the EU's executive.

However European refiners say high global sugar prices in recent years have made it hard to secure affordable imports of raw cane, and blame EU import restrictions and customs duties for aggravating the problem and forcing refineries to reduce production.

The companies argue that EU mismanagement has led to discrimination against cane refiners and sugar prices – which are nearly 50% higher than world levels – causing considerable harm to European consumers, food manufacturers and cane refiners.

Gerald Mason, vice president of EU Affairs for Tate & Lyle Sugars said: “When the cost of making sugar from beet and cane is broadly similar, why is it that beet processors are making record, windfall profits whilst cane refiners make losses?”

“The debate isn’t just about the future of Europe’s cane refiners. It’s about the future of Europe’s food market overall, and its position in an increasingly competitive and globalised marketplace,” said Mason. “We have two choices that face us. One is that we go back to protectionism and insular markets. Or the second one is that we continue our journey towards liberalisation and fair, open, and competitive markets.”

“That’s really the nub of the debate.”