Tate & Lyle Sugars is seeking 35m in compensation from Brussels over the revised EU sugar laws.
The sugar giant claims it has been badly affected by the reduced volumes of cane sugar in the EU caused by strict import arrangements imposed in 2006.
Under the rules, sugar can only be imported from certain developing countries, predominantly in Africa, the Caribbean and Pacific regions.
This had left the company with a shortfall in supply, forcing it to start closing its Thames refinery at the weekends from January this year. The plant, which used to operate 24/7 and produce 1.1 million tonnes of sugar a year, now only ran at 60% to 70% capacity, the company said.
“The Commission is forecasting imports of 1.65 million tonnes more than a million tonnes of shortfall,” Ian Bacon, president of Tate & Lyle Sugars warned. “The refining sector in Europe has a capacity to refine 3.5 million tonnes. We and all other refineries are about a third short.”
Details of Tate & Lyle’s legal action emerged in the Official Journal of the EU. The move follows revelations in The Grocer that food suppliers had called on the EU to help them in the wake of shortages and soaring prices (The Grocer, 13 August, p6).
A Defra spokeswoman said high world market prices and inflexible EU regulations had led to unacceptable shortages for British manufacturers.
More than one million extra tonnes of sugar would now enter the market thanks to the UK’s successfully lobbying of the EU to take emergency measures, including the suspension of import duty on specific categories and introduction of some zero-duty and reduced duty import quotas, she added.
Tate & Lyle said the extra sugar only amounted to four days’ supply. But an EC spokesman said: “The Commission has responded to this exceptional situation by taking measures aimed at allowing sufficient quantities to be available on the EU markets.”