Decision came as no surprise, say experts

PEOPLE will today sweeten their traditional St Patrick’s Day cuppas with spoonfuls of Irish sugar.

But it’s a treat they will be denied in the years ahead following Greencore’s decision to exit sugar production in Ireland after eight decades.

In future, consumers will have to flavour their national holiday celebrations with the help of sugar manufactured in other countries.

But not even the sweetest of these imports will ever take the sour taste off the decision to close Mallow Sugar Factory and bring one of the State’s foundation industries to an end.

Larger sugar processors in Europe have been aggressively targeting the Irish market for the past few years because they saw the industry here as being very vulnerable to European Union reforms for the sector.

Imports now account for more than 25% of the sugar consumed in Ireland, as European manufacturers expanded ahead of the EU’s radical reform decisions.

Industry sources said yesterday these processors have been selling hard into the Irish market in anticipation that the reforms would undermine the viability of sugar production in Ireland.

Greencore’s decision to close the country’s last remaining sugar factory at Mallow next May has now left that market to be captured by strong European manufacturers.

Paul Meade of NCB Stockbrokers said the news was not unexpected given the complex and protracted nature of the company’s discussions with sugar beet growers over the past number of weeks.

“In addition, we believe that deterioration in EU sugar markets, especially in Ireland with the entry of new competitors jockeying for market share ahead of Greencore’s exit coupled with the 11.6% reduction in Ireland’s national quota, supported the decision to exit now,” he said.

Meanwhile, Greencore underlined its commitment to customers. The company has sufficient stocks of sugar to fully service Irish industrial and retail customers until November 2006.

The fallout from the decision to close the Mallow plant, with the loss of 324 full-time and seasonal jobs and the ending of beet growing for 3,700 farmers, continued yesterday with analysts agreeing it was not unexpected.

John O’Reilly of Davy Stockbrokers said it was extremely unlikely that another year’s production by Greencore would have been profitable.

Goodbody’s Liam Igoe also said the decision came as no surprise given the continued weakness in sugar pricing in the market.