Government decision flawed, claims Greencore

THE Government had no power under the relevant EC regulations to dictate to Greencore how it should spend some €145.5 million in restructuring aid following the rationalisation of the European sugar industry and Greencore’s withdrawal from sugar production here, the High Court was told yesterday.

In adopting virtually all of the findings of economic consultants Indecon in their report on the consequences of rationalisation of the Irish sugar industry, the Government and Minister for Agriculture had adopted a “fundamentally misconceived” approach as to how the EC regulations for rationalisation of the sugar industry should be interpreted, Michael Collins SC, for Greencore, said.

The Government had failed, when making itsdecision in July last year, to even consider the losses to Greencore in relation to assets write-offs and income losses into the future as a result of withdrawal from sugar processing, counsel said.

Agriculture minister Mary Coughlan had also directed that Greencore allocate some €37m to the company’s pension fund when there was no evidence it was underfunded, counsel said. There was never any question of the pension fund having ever been inadequately funded, either in the past or now, he stressed.

Mr Collins was opening Greencore’s proceedings alleging unlawful interference and objective bias by the Government in directing how the company should allocate the €145.5m in EC restructuring aid. The case is being heard by Mr Justice Frank Clark, sitting in the Commercial Court, and is listed to run for two weeks.

The action has been brought by Greencore Group and Irish Sugar, trading as Greencore Sugar, against the Government, the Minister for Agriculture and Food, Ireland and the Attorney General. The Irish Farmers Association, as representative of the sugar beet growers, and the Machine Contractors Association, are notice parties.

Greencore wants to overturn the Government’s decision of July 12 last that some €47.1m restructuring aid go to sugar beet farmers and contractors, €28.4m to employee redundancy payments in line with Labour Court recommendations, €20m for environmental and demolition costs and some €50m for pension fund requirements and other payments in order to demonstrate a “sound economic balance” between the elements of the restructuring plan.

It claims the Government’s decision is “fundamentally legally flawed” and in breach of EC regulations of 2006 adopted to give effect to the reform of the sugar regime in the EU.

The case continues.