| Contested issue |
Position of
British Sugar (BS)
| Position of
Tate & Lyle (T&L)
|
| Exclusivity of supply of raw sugar cane for full-time refiners
| It is strongly in the interests of all developing countries to be able to sell their raw sugar to as many industries as possible, as this gives them the best terms and prices.
A comparison with quotas is not valid as they represent a limit, not a guaranteed volume.
| A reduced volume of sugar from a restricted supply of imported cane would render T&L's operations unviable due to the need to maintain capacity to cover fixed costs.
Beet processors would have their fixed costs covered by the beet enterprise and would be able to use the factories for cane in those months of the year when beet is not processed. This skews any comparison of the costs incurred by the same factory refining cane.
Marginal beet factories which remained in production by refining cane would stifle the aim of the restructuring scheme, to decommission inefficient factories.
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| Differential impact on margins
| T&L's comparison of processor and refining margins is flawed due to the assumptions made on costs and prices.
The financial effects of the reform proposal on EU refiners and beet processors are broadly similar, so there is no justification for special treatment for refiners in the form of a refining subsidy.
| The refiners' margin would fall by 77% while the beet processors would fall by only 44%. T&L said that the retention of a refining aid payment of around €60 per tonne is the only solution to fix this distortion.
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| Whether Tate & Lyle could survive in a deregulated market
| BS questioned T&L's assertion that it could survive in a deregulated market and argued that if this was the case, then T&L would get better financial returns from the reform proposals than all EU beet processors.
| T&L said it is only asking that a company that could compete effectively in a totally deregulated market should be treated equitably in a regime that continues to be based on the desire to artificially support the beet sector.
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| General balance of current proposals
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- Refiners are protected from cuts in volume as experienced in the beet sector
- Further concessions for the refiners would tilt the beet/cane balance even more in the refiners' favour
| T&L said that BS has the options of purchasing additional quota or going into the restructuring scheme, neither of which are available to refiners.
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