September 22, 2012 / 10:58 AM / in 5 years

European Commission faces legal action over sugar rules

BRUSSELS (Reuters) - Tate & Lyle Sugars is taking legal action against the European Commission, claiming damages for what it called the mismanagement of the European Union’s sugar market, in the third such case since 2011.

Sugar remains one of the most heavily regulated commodities in the European Union, with domestic sugar beet growers benefiting from national production quotas and fixed prices that are overseen by the EU’s executive.

But European refiners say high global sugar prices in recent years have made it hard to secure affordable imports of raw cane, and blame EU import restrictions and customs duties for exacerbating the problem and forcing refineries in Britain and Portugal to reduce production.

“It is beyond belief that the Commission still claims that its management of the EU sugar market has been a success for consumers and competition, because the facts do not bear this out,” said Ian Bacon, President of Tate & Lyle Sugars.

“Consumers are paying the price of misguided and stubborn policies, and these policies are putting the entire cane refining sector at risk,” he said.

Tate & Lyle Sugars, which is owned by U.S. firm American Sugar Refining, is claiming 75 million euros in damages.

Reporting By John O'Donnell; Editing by Hugh Lawson

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