By David Brough
LONDON (Reuters) - Cane refiner Tate & Lyle (LON:TATE) Sugars is in favour of Britain leaving the EU unless the bloc introduces reforms to create a more level playing field with the beet sector, a senior executive said on Thursday.
The London-based refiner, Europe's largest, would like to obtain tariff-free access to cheaper sources of sugar such as Brazil, Thailand and Australia, but has to rely on often higher cost suppliers who have been granted preferential access to the EU market.
European trade sources say the EU beet sector has an advantage because it receives direct EU support and has the lobbying power of thousands of beet farmers across the bloc, while the cane sector pays artificially high prices for its raw sugar under EU rules.
“European policies are the biggest single drag on the competitiveness of our sugar refinery here in London, and the biggest single threat to jobs,” Gerald Mason, Tate & Lyle Sugars senior vice-president, told Reuters in an interview on Thursday at the refinery.
The refinery, which has been producing sugar continuously in the east London suburb of Silvertown since 1878, employs 850 people.
“We’d like to see some reforms to those policies before people go to the polls on June 23, but if we can’t get that, then we’re really clear that the future of the 850 people who work here, and their families who rely on the plant for their livelihoods, would be better served outside of Europe.”
The refinery supplies roughly 30 percent of the UK’s sugar needs, producing around 550,000 to 600,000 tonnes of refined sugar a year, down from around 1.1 million tonnes in 2009, Mason said, due to competition with the beet sector.
The refinery has also cut its operating week to 4-1/2 days in recent years, from seven days.
The refiner currently uses raw sugar shipped by bulk vessels from some of the world’s poorest countries which together account for 5 percent of global sugar trade, such as Guyana, Fiji and southern African producers.
“We’d like to see more liberalisation of the countries that we can buy sugar from and the tariffs that we have to pay,” Mason said.
But trade sources say the strength of the EU beet lobby means that reforms would be difficult to achieve and virtually impossible before the referendum.
Tate & Lyle Sugars kept a small office in Brussels which it has used to lobby politicians for the EU cane refining sector.
After the EU ends sugar production quotas in October 2017, cane refiners such as Tate & Lyle Sugars will continue to pay import duties for supplies, while a number of EU beet sugar producing countries will continue to pay support to farmers.
“We don’t need to talk to our staff about how Europe affects them,” Mason said. “Every single one of the 850 people who work here knows how European policy discriminates against cane sugar refining.”
Tate & Lyle Sugars, which has been owned since 2010 by U.S.-based ASR Group, also has a refinery in Portugal, and a joint venture plant in southern Italy.