Tate & Lyle Sugars to Argue Against EU Sugar Rules in Court

Tate & Lyle Sugars, owned by American Sugar Refining Inc., will argue in court tomorrow against what it considers “mismanagement” of Europe’s sugar market by the European Commission, the bloc’s regulatory arm.

The owner of London’s sugar refinery and Sidul Acucares Unipessoal Lda., based in Santa Iria da Azoia, Portugal, will present their arguments before the General Court of the European Union in Luxembourg, Tate & Lyle said in a statement e-mailed today. EU sugar refiners that import cane sugar, such as Tate & Lyle, haven’t been able to get enough supply at a time when EU sugar prices are at a record amid a shortage.

“We are relying on the court to set a precedent by recognizing that this case, and the two others that we have so far lodged against the commission, really are about decisions made in Brussels and Brussels alone and how those decisions undermine jobs, consumers and competition in Europe’s sugar market,” Ian Bacon, Tate & Lyle president, said in the statement.

The hearing, which comes in response to the first of three complaints against the commission, will serve to decide whether their case is admissible to the court, said Tony Bennett, government affairs and strategy manager at Tate & Lyle. “This is a legal question, and we shall see what the court decides,” Roger Waite, a spokesman for the commission, said in an e-mail response to questions by Bloomberg News.

Supply Limits

The EU sugar market is regulated by the commission and rules limit the amount domestic beet sugar producers can sell within the bloc. That leaves part of the EU’s needs to be met by imports of raw cane sugar to be processed into the white variety by the continent’s refineries.

EU sugar prices climbed to a record 728 euros ($967) a ton in November, according to the commission. That is 88 percent more than the average price for the sweetener traded on the NSYE Liffe exchange in London that month. Shortages prompted the EU to take additional measures to allow local producers to sell more and implement a tender system to authorize more imports.

Tate & Lyle and Sidul Acucares’s complaints against the commission alleged damages of 198 million euros, the companies said in a statement on Sept. 22. The hearing tomorrow comes after U.K. member of the European Parliament Marina Yannakoudakis met with Joaquin Almunia, the EU’s vice president in charge of competition, to discuss rules she says favor sugar beet producers over cane refiners.

“Short-term impacts on cane refiners and consumers will be compounded in the medium term by forcing cane refiners out of business,” Tate & Lyle said in today’s statement. “Such a tragedy would further concentrate Europe’s sugar market into the hands of the already highly concentrated beet processing sector.”

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