Tate & Lyle wants decision rescinded on bulk sugar
There is a new twist to the sugar industry saga facing Barbados, as one of the world’s most powerful sugar and multinational agribusinesses resists moves by the island to end it exports of bulk sugar to the United Kingdom.
Officials of Tate and Lyle’s Sugars (TLS) have been seeking to get the Ministry of Agriculture rescind its decision to stop supplying the commodity to TLS, which is the only sugar cane refiner in the UK, providing 850 jobs at its Thames refinery in Central London.
However, Minister of Agriculture Dr David Estwick has been insisting that it made no sense for the island to persist with its sale of bulk sugar to the EU at a “massive” loss. He has further suggested that the only scenario in which bulk sugar production makes financial sense, is at the domestic and regional level where Barbados could take advantage of the CARICOM Single Market and Economy rules of origin with respect to importation of sugar.
However, this position is not sitting well with the UK’ sole sugar refiner, which, according to Barbados TODAY investigations, has now enlisted the support of the British High Commission in Bridgetown.
Last month, the High Commission, through it Trade & Investment division, wrote to the Permanent Secretary in the Ministry of Agriculture Esworth Reid seeking to arrange a meeting between local agriculture officials – including Minister Estwick – and the top brass of Tate and Lyle to discuss the matter.
However, Estwick declined to meet with the officials and instead sent his Chief Agricultural Officer Barton Clarke as the Government’s representative at the talks.
In the letter dated November 7, 2014 – a copy of which has been obtained by Barbados TODAY – the head of Trade & Investment for Barbados and the Eastern Caribbean, H.S. Howell, sought to make a case for this country to continue selling bulk sugar to TLS in London.
“By way of background, TLS – part of the ASR Group – purchase (and has done so for many years), all of the bulk raw sugar exported from Barbados with preferential access to the EU,” the letter said.
It noted that in 2012, the value of those sugar sales to Barbados was about 11 million US dollars.
The British official was also at pains to inform the Permanent Secretary that TLS was currently facing “existential challenges” as a result of changes to the EU sugar regime.
“The amendments will liberate the production and sale of beet sugar and isoglucose products in the EU market from October 2017. They will tend to drive down the price of sugar in the EU, which has traditionally been higher than world prices, due to the regulation,” Howell noted.
However, he told Reid that imported raw cane sugar was covered by the European Partnership Agreements.
And to press home its concern regarding the Government’s decision to cease bulk sugar exports to TLS, the senior official said that sourcing the commodity from traditional suppliers such as Barbados was important to its operations.
“It also means TLS have a shared interest in their sustainability and success,” added the letter.
The trade and investment official also brought to light plans by TLS’ parent company – American Sugar Refinery (ASR) – to take control of the Barbados-based West Indian Central Sugar Cane Breeding Station (WICSCBS) as part of moves to make major inroads into the local sugar industry.
It informed the Permanent Secretary that the plan would improve the sustainability of the breeding station in Barbados by joining forces with other Florida cane growing companies to widen membership in the Sugar Association of the Caribbean (SAC), comprising Barbados, Jamaica, Guyana and Belize.
The letter further revealed that this plan would contribute a pro-rata basis of cane ground, meaning that TLS and ASR would pay the lion’s share of the running costs, thus relieving the other SAC members of any responsibility.
The UK official said in the correspondence that the two companies were seeking Barbados’ support for this initiative and that was one of the reasons the Senior Vice President and International Relations Advisor at Tate and Lyle Sugar of London, Mac McLachlan, and President of Redpath Sugars in Toronto Jonathan Bamberger were trying to have a meeting with Estwick.
But in a letter to Minister Estwick after meeting with the TLS representatives, the Chief Agricultural Officer reported that a company called Florida Crystals, which recently bought over the Belize Sugar Corporation, was owned by the same Tate and Lyle, which were all affiliates of ASR.
Sources told Barbados TODAY that Florida Crystals had been advising a group of local industry stakeholders who recently withdrew an alternative plan to rescue the struggling sugar industry.
Tate and Lyle has also had meetings in recent times with the Barbados Agricultural Management Company as they were concerned about the Government’s proposal for transforming the sugar industry from bulk sugar production to “a multipurpose sugar cane industry, producing food grade sugars, electricity and other downstream products to ensure the economic viability of the industry,” Clarke warned Minister Estwick.