Sector News

Tate & Lyle Sugars: We’d be better off outside the EU unless Cameron secures major reforms

June 9, 2015
Food & Drink
Britain’s last remaining cane sugar refiner has said it would be better off outside the European Union unless David Cameron secures major reforms before the referendum in 2017.
 
Tate & Lyle Sugars said its production has fallen from 1.1m tonnes of sugar to about 600,000 since 2009.
 
The company said the slump began when the EU began scaling back its market regulation of beet sugar rather than the cane sugar that the firm imports.
 
“If we carry on down this route it puts our business and the jobs here under real threat,” said Gerald Mason, head of T&L Sugars in the UK. “We see the Government’s renegotiation as the once-in-a-lifetime opportunity, the last chance if you like, to keep what’s left.”
 
He said EU regulations are the “single biggest impact on our business”. The EU is unleashing Europe’s beet farmers in 2017 by removing a production cap, in a move that is expected to push down prices 15pc by 2020. Farmers will be subsidised to counteract this drop, while cane sugar imports continue to face tariffs of up to €339 (£246) per tonne.
 
EU farmers produce 50pc of the world’s sugar beet, a relic of Napoleon’s efforts to circumvent the English naval blockade, which prevented ships carrying sugar cane from reaching the Continent. Beet is a parsnip-like crop used to produce the same products as sugar cane, the raw material used for 80pc of global sugar production and chiefly grown in subtropical countries.
 
Tate & Lyle Sugars has shrunk from six refineries to one since the UK joined the EU. The firm believes it would be impossible to switch production to sugar beet, given the huge cost of transporting the lower-yielding crops, which are not enough to meet Europe’s sugar consumption alone, and adapting its refinery.
 
“For us, the option isn’t to give up and turn over to beet production. Our only option to get a fair deal for cane sugar in Europe is through the referendum, through the renegotiation.
 
“If [the Government] can do that, I think we fully support staying part of a fair Europe. If they can’t do it, I am under no doubt that our business – I can’t speak for the whole of the UK – but our little business and the people who work here and whose lives and families depend on it, we would be in a much better position outside of Europe.”
 
The company was spun out of its FTSE 100 namesake in 2010 and is now owned by American Sugar Holdings, one of the world’s biggest cane sugar refiners. Its factories on the banks of the Thames have spent over a century producing Tate & Lyle sugar and Golden Syrup, whose 1883 tin design is officially the world’s oldest unchanged brand packaging.
 
T&L Sugars made a profit before tax of €30.5m in the year to September 2013, on revenues of €704m, according to its most recent accounts. The firm employs about 800 people, having cut around 50 jobs since 2010. The Silvertown plant ended 24-hour production in 2012 and now operates five days a week.
 
The company opened a small Brussels office in 2010 in an attempt to make its case directly to EU politicians, and has launched several unsuccessful legal challenges to the regulations.
 
Mr Mason said that officials have expressed sympathy with their position “but they’re powerless to do any different because of the voting structure” within the European Parliament.
 
By Marion Dakers
 

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