EU shake-up of sugar industry as quotas to go

FIVE years after an EU sugar industry reform closed the Irish Sugar factories at Mallow and Carlow, Brussels is ready to shake-up the industry again.

In October, the European Commission is expected to propose abolition of sugar production quotas.

EU food manufacturers who are struggling to cope with soaring sugar prices have been clamouring for change. Since the 2006 reform, the EU has gone from being one of the world’s largest sugar exporters to one of the largest importers.

“The price is increasing virtually daily, and we have to get some stability back into the market,” James Lambert, CEO of Europe’s largest own-label ice cream manufacturer, R&R Ice Cream, told www.foodnavigator.com.

Industries like his in Britain have to pay €880 per tonne for sugar, 60% more than one year ago. Non-EU sugar is available for about €600, but food processors have to pay an import tariff of €417 per tonne. They want the EU to increase or scrap sugar production quotas, or cut import tariffs.

The European Commission has taken some action on both of these fronts, to increase the sugar supply by about 1m tonnes in the past year — but strong world sugar markets are also to blame, triggered by lower than expected sugar harvests in Brazil and Australia, and global demand rising about 2% per year.

Since 2004, more than 80 EU sugar factories have closed down.