Sugar factories to close unless price row settled

Irish Sugar will begin a closedown of its plants in Carlow and Mallow from tomorrow unless a price dispute with beet suppliers is resolved, the company said yesterday.

Members of the Irish Farmers' Association yesterday began withholding supplies from the factories, accusing the company of cutting this year's sugar beet price by 10 per cent. Protest meetings were held outside both plants and at a collection depot in Wellingtonbridge, Co Wexford.

A spokesman for the Greencore-owned company said it had enough supplies to stay in production for today only.

"Basically we run out of beet tomorrow night and unless there's more coming in the plants can't operate. That decision is being forced on us. It is not our decision."

He could not say what the immediate implications were for the 600 staff employed by the company, as "closing is not something we really want to countenance". The move was inevitable, however, if supplies were not restored.

In the event of a closedown the most vulnerable staff would be 200 seasonal workers employed for the sugar beet campaign, which began in early October and is about a third of the way through.

The IFA president, Mr Tom Parlon, said the closure threat had implications for jobs, but Irish Sugar was the "cash cow" of Greencore and growers had been forced into a situation in which they had to withdraw supplies.

Addressing farmers outside the Carlow plant, he said beet suppliers had a legitimate claim for a price increase in light of production costs, which had risen by up to £60 an acre.

He described as "misleading" the company's offer of an independent arbitrator as a solution to the problem. "I was personally involved throughout the negotiations with Greencore personnel and I am stating categorically that the company's arbitration process includes a formula to cut the price of beet by £3 to £4 per tonne."

A company spokesman said neither side should be allowed to dictate the price of sugar beet to the other. However, Irish Sugar would expect an independent arbitrator to take account of the commercial disadvantage it faced in relation to French and British competitors, which were paying lower prices and supplying sugar to the Irish market.

The company's director of agriculture, Mr John Broderick, denied the IFA's claim that a reduction in price was being sought this year.

"Irish Sugar has offered and wants to pay last year's price for sugar beet, despite the fact that this puts the company at a competitive disadvantage vis-α-vis its UK and French competitors."

Mr Parlon said the sugar division of Greencore made £26.5 million profit last year, a margin of 18 per cent, which was at least three times the normal for Irish food processors.

"This situation is a direct result of Greencore's monopoly position which has allowed them to bully growers and persist with their intransigence despite 10 months of negotiations," he said.