Sugar importer launches Greencore action

A SUGAR importer and distributor has begun a High Court action for damages against the Greencore Group arising out of a European Commission decision that it had abused its dominant market position during the 1980s and 1990s.

ASI Sugar, Carriglea Industrial Estate, Naas Road, Dublin, is seeking damages, including punitive and aggravated damages, against Greencore Group, Irish Sugar, and Sugar Distributors Ltd for the loss of profits it claims it suffered as a result of certain practices during the 1990s.

In what was described as the first action of its type ASI had taken proceedings due to what it says were the defendant’s abuse of its dominant position in the granulated sugar market for retail and industrial sale in Ireland, their infringement of competition law, the EU treaty and were in breach of their statutory duty.

The defendants deny the claims. The case, which opened before Mr Justice Liam McKechnie yesterday, is expected to last for several weeks.

James O’Reilly SC, for ASI, told the court that this “unique action” was a follow-on to the EU commission’s 1997 finding that Irish sugar, which had 90% share of the Irish market, had abused its dominant position by engaging in practices such as selective pricing, export rebates, price discrimination against competing sugar packers, target rebates and selective pricing for industrial sugar.

Counsel said that all but one of the breaches were upheld when the decision was appealed to both the courts of first instance and the European Courts of Justice, which ruled on the matter in 2001. The defendants were fined more than €8m by the commission, which was reduced on appeal to approximately €7m.

Counsel claimed that as a result of the abuses ASI were prevented from fully participating in the granulated sugar market for industrial sale in Ireland, and suffered enormous loss.

Counsel said that so adverse were the consequences of the defendant’s “unlawful market strategies” ASI was driven out of the Irish retail sugar market placed in July 1994 barely one year after an attempted re-entry.

He said that in 1990 the company, which was then mainly owned by a French company, attempted to secure a presence in the Irish market with sugar sourced in France. That entry, it was claimed was met, with a “sustained and hostile” response from the defendants.

In their defence the defendants claim contributory negligence, and that the claim is statute barred. The defence further claims that ASI had difficulties because it was unable to source the sugar it required, that retailers wanted Irish products and that there were concerns over sugar quality.

The defendants also claim that ASI had failed to demonstrate any loss in relation to claim arising out of the alleged targeting of ASI’s customers in 2000.

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