Danish food ingredients firm Danisco sees the European Union’s compromise on sugar reform as as a constructive negotiation result that will ensure the foundation for long-term planning in the sugar sector.
“We’re very pleased that the reform process is almost at its end now,” said executive vice president Mogens Granborg. “A new direction for the EU’s sugar policy is indeed necessary to ensure the competitive beet and sugar production in Europe and we agree with the main principles of the council’s decision.”
‘The commission’s initial proposal has been subject to some adjustments in the course of the negotiations, some of which are positive, some more negative,” he said. “For instance, we consider the extended period for implementing the price reduction, which turned out to be a little less than initially proposed, as a sensible solution, whereas we see a risk in extending the period for providing the high-rate restructuring aid in the case of factory closures, as it could lead to an increasing sugar surplus on the market for a longer period.”
‘It’s also clear that a number of important details remain unsettled at this late stage of the reform process,” he said. “We need clarification of the specific terms for exports and imports and for the production of sugar for non-food use.’
‘Much will also depend on how the growers will respond to the new conditions,” he said. “At Danisco we will now finalise our deliberations for the production adjustments and other efficiencies that we need to effect to secure our place among the European sugar elite going forward.”
“This will be done in close dialogue with our employees, beet growers and other stakeholders,” he said. “We will probably be into February or March before we have the full EU foundation allowing us to finalise the planning of these activities.”
“Danisco’s sugar business builds on a well-consolidated platform, which gives us strong potential to take advantage of the opportunities that will arise in the wake of the sugar reform, for example by entering new business areas and markets,” he said.
In a stock exchange notice of 22 June 2005 Danisco announced that it expected sugar earnings to stabilise around DKK600m (US$94.5m)-DKK750m once the sugar reform has been fully implemented. The council’s decision does not lead to any change of these expectations, it said.