Executives at Tate & Lyle Sugars are at the General Court of the European Union today to fight EU legislation that has “destroyed jobs" and puts its London refinery employing 850 people at risk of closure.
Tate and Lyle Sugars has filed three lawsuits against the European Commission for causing sugar prices to rise artificially by placing restrictions on imports and spending five billion euros to support European beet sugar farmers.
European sugar prices have risen by over 15% since reforms made by the EU in 2006 and are now 80% higher than prices in the rest of the world.
“High prices are bad for consumers and we can ill afford to lose jobs in London and beyond at a time of austerity,” said Conservative MEP Marina Yannakoudakis, who met with the vice-president of the European Commission Joaquín Almunia yesterday.
“Refineries across Europe have stopped running at full capacity and there have been lay-offs with more jobs threatened,” added Ms Yannakoudakis.
Capacity has dropped below 60% at Tate & Lyle Sugars’ refinery in East London, which is the biggest refinery in Europe and was operating for seven days a week until 2010.
The Conservative MEP believes that the European Commission’s sugar regime is distorting competition by not allowing a level playing field for sugar cane refiners and beet processors.
“If the European Commission were to allow more flexible imports of raw sugar, refineries would be able to expand in order to meet the increased demand. Cane refiners need to be given a fair chance to compete.”
Tate and Lyle Sugars, which is owned by American Sugar Refining, claims the action is protectionist towards German and French sugar beet growers.
Cane refiners, which make white sugar for industry, confectioners and shoppers, are making losses in Europe. Sugar used in this process is imported from tropical countries while beet sugar is grown in temperate countries, with France and Germany two of the five largest producers.
Beet sugar producers are making “windfall profits,” according to Ian Bacon, president of Tate and Lyle Sugars, who argues that without a change to EU policy, cane refiners will be forced out of business in the next five years.
The legislation Tate and Lyle are fighting is part of the EU’s Common Agricultural Policy, voted for by EU member states, which Mr Bacon says has “destroyed jobs, caused EU sugar prices to sky-rocket and discriminates between operators in the sugar market.”
Tariffs on sugar imports introduced to protect sugar beet farmers are too high to make it worthwhile importing sugar from overseas. This means that food producers such as Mars, Coca Cola, Pepsi and Nestle are having to pay higher prices for sugar in Europe than elsewhere in the world.