The opening shots have been fired in what is likely to be one of the first and fiercest battles to shape post-Brexit trade policy.
British Sugar has embarked on a Back British Sugar campaign, in opposition to Tate & Lyle Sugars, which campaigned to leave the EU. British Sugar, part of Associated British Foods, produces its Silver Spoon brand from British beet, but Tate & Lyle’s sugar is refined from imported cane.
British Sugar is effectively the monopsony — sole buyer — for the production of Britain’s 3,500 growers and makes two-thirds of Britain’s sugar.
Farmed commodities, and sugar in particular, are a common source of trade disputes because of state subsidies and claims of protectionism. The EU has historically had tight restrictions on cane imports to protect beet growers, but it has been liberalising in recent years. In September an EU restriction on beet production will be phased out. The consequences for cane producers who export to the EU could be stark.
Tate & Lyle says Brexit is “a golden opportunity” for Britain to revive cane sugar refining. It claims that EU protectionism has restricted choice and led to it halving the size of its UK refining business. The company paid an extra £34 million for raw cane sugar in 2015, pushing it to a £21 million loss.
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Paul Kenward, managing director of British Sugar, said that imported cane from Brazil or Thailand benefits from state subsidies, which “creates a distortion and the current trading environment broadly equalises some of those distortions”.
Gerald Mason, of Tate & Lyle, said: “The EU has a cheap white sugar policy and an expensive raw sugar policy. That’s what makes us uncompetitive.”