EU debates sugar ingredients

By Lindsey Partos

- Last updated on GMT

Related tags Eu sugar reform European union

EU farm ministers met with African and Caribbean counterparts on
Monday to discuss the sweeping EU sugar reform that will bring
cheaper sugar ingredients into the bloc.

The meeting of the ACP-EU council, that continues today, will see parties battling over anticipated reforms to the regime.

An overhaul of the oft-criticised European sugar regime, that trades sugar at three times the world price, is imminent after Brussels rolled out a host of proposed initiatives in June this year.

The Commission plans a 39 per cent cut in sugar prices, taking the guaranteed price from the current level of €631 per metric tonne to €384.80 by 2009/2010 and offer 60 per cent compensation to farmers hit hardest by the reforms.

But the plans, unveiled by the Commission's farm minister Commissioner Mariann Fischer Boel, have met with sharp criticism from opponents who claim "the blunt and selfish reform package reform"​ will destroy sugar industries in poor countries, on which millions rely for employment.

Representatives from poor nations in Africa and the Caribbean are opposed to the reform because it would cut their preferential access to EU markets.

Oxfam International and World Wildlife Fund, longtime campaigners for sugar aid reform, staged a protest yesterday outside the European Council building in Brussels to highlight "the unjust treatment of sugar farmers in the developing world."

"The EU reform plans are skewed massively in favour of large-scale European producers and big processing companies,"​ says Luis Morago, head of Oxfam's Brussels office.

Reform to the EU's system for protecting its sugar growers was drafted following a successful World Trade Organisation challenge to the EU's price support system by Australia, Brazil and Thailand.

The WTO ruled in April that the EU's aid to its 325 000 European farmers sugar beet farmers, which guaranteed them high prices, was illegal.

France, Germany and Poland are the EU's biggest producers.

While the reform will mean cheaper sugar sources for European confectioners, a handful of leading ingredients suppliers will feel the pinch on the bottom line.

Earlier this month Associated British Foods, the owner of British Sugar, warned that sugar reform could slice £10 million from operating profit in 2006/7, and some £40 million per year thereafter.

And ABF is not alone, or perhaps the worst hit. Profits at UK sweetener firm Tate & Lyle and Danish ingredients firm Danisco will be hit hard by the proposed reform.

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