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10 July, 2021 - 00:24 By Tony Quested

British Sugar lawyers challenge tick-through for US imports

British Sugar, which has four major operations in this region, has initiated a legal challenge to the Government’s tariff free-for-all. British Sugar objects to a US company being allowed to import raw cane sugar and refine it in London.

Tate & Lyle is said to be importing 260,000 tonnes of raw cane sugar into the UK tariff free. The zero-rated autonomous tariff rate quota (ATQ) came into effect on  January 1 after the end of the Brexit transition period.

British Sugar, which has plants in Bury St Edmunds, Peterborough, King’s Lynn, and Norwich, has invested £250 million in the past five years to make its four advanced manufacturing plants more efficient. It partners with more than 3,000 growers.

The British beet sugar industry grows, processes and delivers high quality sugar to over 50 per cent of the UK market and exports across the world.

The company, which provides work for 9,500 people across its supply chain, has created what it calls “a vibrant and globally competitive British success story that can compete on an equal footing with any sugar processor in the world.”

Its hackles have been raised by the Government allowing Tate & Lyle’s owners to parade the Union Jack while pumping supplies into the country via the United States – with whom, incidentally, this country has no trade agreement.

British Sugar contests the Government’s insistence that domestic sugar beet growers and the associated refining industry should not be negatively affected as a result of the ATQ.

British Sugar lawyers will argue that they will be unfairly disadvantaged by the decision.

Managing director Paul Kenward told the FT and Farmer’s Weekly that the company had not taken the step to challenge the Government’s decision lightly.

“It puts the British beet sugar industry, including more than 2,500 farmers, at a distinct competitive disadvantage, as well as harming the interests of farmers in developing countries.”

As both media report, American-owned Tate and Lyle is the only company that imports and refines raw cane sugar in the UK. Kenward told them that it was wrong to single out raw cane sugar alone for special treatment.

“We believe that the Government is selectively and unfairly benefiting that one American company to the tune of at least £12 million this year.”

American Sugar Refining – the ASR Group – owns Tate and Lyle, which has the capability to process 1.2m tonnes of imported raw cane sugar at its Silvertown facility in London.

The case, which has been brought by British Sugar plc is against the international trade secretary Liz Truss. As the FT pointed out, it is also the first test of how far contentious state aid clauses in the Northern Ireland protocol will impinge on the UK government’s ability to issue subsidies.

Legal experts told the FT that the case “would be keenly watched by ministers and industry for precedence in UK trade and subsidy policy.”

For the record, lawyers for British Sugar argue that the effective ‘subsidy’ for Tate & Lyle imports would also unfairly undercut EU sugar producers who export 500,000 tonnes of sugar to the UK and be in breach of both the Northern Ireland protocol and the EU-UK Trade and Cooperation Agreement.

Under article 10 of the protocol, any UK government state aid decision that impacts on goods traded with Northern Ireland must be referred to the European Commission for approval. The Government says it intends to contest British Sugar’s challenge.

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