Sugar sector needs help to sweeten relations

If there's one thing reliable about sugar beet farming and processing, it's the annual row between the IFA and Greencore over…

If there's one thing reliable about sugar beet farming and processing, it's the annual row between the IFA and Greencore over the price of beet.

Relationships between the IFA and Greencore have for years been little short of poisonous, but the situation has now reached a stage where somebody needs to go in and knock heads together. Beet farming is crucial to the livelihood of 5,000 farmers in the south and south-east and also to the financial strength of Greencore.

Sugar processing has been a cash cow for Greencore for many years, but in the past two years there has been a serious downturn - operating profits from the sugar business were down 8 per cent last year. Still, Greencore's profit margins from a business that has a 90 per cent share of the market in the Republic and 65 per cent in the North were a healthy 18 per cent.

There is a view that this year will show little improvement - and that explains the company's determination to freeze the price of beet at last year's levels. The farmers, on the other hand, are looking for a 13 per cent increase in the beet price and have stopped delivery of beet to the Carlow and Mallow factories, although about one-third of the beet crop has already been delivered to Irish Sugar's two factories and a collection point in Wexford.

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So Greencore wants to freeze the price and the farmers want a 13 per cent rise. Even to an outsider, there seems to be scope for haggling, although judging by Tom Parlon's comments this week, the IFA believes that Greencore is abusing its monopoly position (in sugar processing if not in sugar sales) to force a price freeze.

Get an independent third party working on this row before the sugar beet rots and sugar imports eat into Greencore's market share.