The European Commission’s reform of the EU sugar regime will hit the operating profits of sugar manufacturers.
The EU said yesterday that it would cut the minimum price for white sugar by 39% and the minimum price for sugar beet by 42%. The changes are expected to be implemented in 2006-7.
However, Tate & Lyle and Associated British Foods both warned that the cut in prices would dent their profits.
Tate & Lyle estimated that in 2007 it would see a reduction in operating results of £20m and £60m by 2008.
It said that the regime was “seriously inequitable” and would “be seeking a fairer and more satisfactory outcome in the next few months.”
Associated British Foods said that its sugar operations in the UK and Poland would be affected, causing operating profit to drop by £10m in 2006/7, and £40m in 2007/8.
The EU said yesterday that it would cut the minimum price for white sugar by 39% and the minimum price for sugar beet by 42%. The changes are expected to be implemented in 2006-7.
However, Tate & Lyle and Associated British Foods both warned that the cut in prices would dent their profits.
Tate & Lyle estimated that in 2007 it would see a reduction in operating results of £20m and £60m by 2008.
It said that the regime was “seriously inequitable” and would “be seeking a fairer and more satisfactory outcome in the next few months.”
Associated British Foods said that its sugar operations in the UK and Poland would be affected, causing operating profit to drop by £10m in 2006/7, and £40m in 2007/8.
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