June 7, 2013 / 5:11 PM / in 5 years

EU court allows sugar refiner to seek damages from Commission

* Tate and sister company filed complaint in May 2011

* Court rejected request from refiner to annul regulation

By David Brough

LONDON, June 7 (Reuters) - An EU court has ruled that refiner Tate and Lyle Sugars can bring a damages action against the European Commission for its EU sugar market policies.

The court, however, rejected a request from Tate & Lyle to annul one of the regulations of the EU sugar regime.

Ian Bacon, president of Tate & Lyle Sugars, welcomed Thursday’s decision of the General Court of the EU to reject the Commission plea that its damages action was inadmissible.

“Not only are the Commission actions discriminating against European cane refiners in favour of the European beet industry, but they are costing jobs as well as costing consumers dear,” Bacon said.

“Now that the General Court has upheld our right to present our arguments, we are confident that we will get a fair hearing.”

The Commission adopted measures to tackle a shortage of sugar imports in the 2010/11 marketing year when market prices were soaring and stocks were low.

The Commission permitted an increase in the sale of beet sugar produced in the EU, in excess of national production quotas, and opened tariff rate quotas for raw and refined sugar imports at zero duty, open to a wide range of participants, not just the refiners.

“On substance we believe we have good and strong arguments for rejecting any claim for damages,” a spokesman for the European Commission said in a statement.

Tate and Lyle Sugars and Lisbon-based sister company Sidul Açúcares filed the complaint against the European Commission in May 2011.

The companies, both subsidiaries of Yonkers, New York-based American Sugar Refining, argued that the Commission’s measures contravened the legal framework for management of the protected EU sugar trade regime, causing them 35.5 million euros ($46.9 million) of damage.

Under EU sugar reforms, imports of raw sugar were supposed to be around 3.5 million tonnes a year, but they had been running far below those levels in 2010/11.

Tate and Lyle Sugars had sought a relaxation of import rules for refiners to permit them to bring in raw material at reduced cost.

Applications for duty-free import quotas opened in April 2011 and were massively oversubscribed. Tate and Lyle Sugars and its sister company accounted for about 35 percent of EU sugar refining capacity but received only 4 percent of the duty-free import licences.

Tate and Lyle Sugars’ Thames refinery in London had been operating at 60 to 70 percent of capacity due to the shortage of imported raw sugar. ($1 = 0.7564 euros) (Additional reporting by Nigel Hunt; Editing by David Holmes)

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