The European Union has slashed the price of sugar by 36% over four years as part of a reform of the EU sugar industry.

Sugar manufacturer Tate & Lyle said that the reform would reduce its operating profit by £20m in 2007, £60m in 2008 and £65m in 2009.

“While the long-term impact on Tate & Lyle remains significant, the final decision to make the cut in the sugar reference price of 36% (instead of the 39% previously proposed) and to delay the implementation of the price reduction is very welcome,” the group said.