Tate & Lyle sugar refinery in Silvertown fighting EU for survival
10:55 06 April 2013
The future of a giant factory which has stood along the London Docks for more than 130 years is at risk of closure thanks to EU policy.
Tate & Lyle Sugars which employs about 850 people at its refinery, straddling across 45 acres in Silvertown, is currently locked in a battle with Brussels over a policy which gives Europe’s sugar beet producers an “unfair” advantage over the UK’s sugar cane refineries.
The Common Agricultural Policy (CAP) was set up in 1962 to protect European farmers and food supply after the founding members of the European Community emerged from more than a decade of severe food shortages during and after the Second World War.
But the policy has proved controversial with member states where agriculture makes up only a small part of the economy such as the UK, who say it favours the French and German.
Thanks to its colonial past Britain has the biggest cane sugar industry in Europe – and the Tate & Lyle site in Silvertown supplies 40 per cent of Europe’s entire sugar cane needs.
Tate & Lyle - it’s a fact
The company was formed in 1921 from a merger of two rival sugar refiners in Silvertown: Henry Tate & Sons and Abram Lyle & Sons.
Henry Tate had established his business in 1869 in Liverpool before expanding to Silvertown in 1878.
Abram Lyle acquired his interest in sugar refinery in Scotland and later had a factory at Plaistow Wharf.
Lyle’s Golden Syrup tin, virtually unchanged since 1885, is Britain’s oldest brand.
The syrup is still being produced at a site at Plaistow Wharf.
In 2008 Tate & Lyle granulated white cane sugar was accredited as a Fairtrade product – all the company’s other retail products followed in 2009.
In 2010 the iconic sugar refining and golden syrup business was sold to American Sugar Refining for £211million.
The company is listed on London Stock Exchange and features on the FTSE 100 Index.
The Sugar Girls, a book based on true stories of women who worked at Tate & Lyle’s two Silvertown factories from the 1940s-60s, was published last year.
Sugar cane only grows outside Europe – and Tate & Lyle imports it from the Caribbean, Africa and increasingly Asia.
By contrast, sugar beet is grown in Europe where some of the biggest producers are France, Germany, Poland, and Holland.
Since 2010 the CAP has restricted the import of sugar cane, adding tariffs of up to £300 a tonne, and the policy makes European sugar prices twice as high as everywhere else – with the world average price recently standing at £322 per tonne compared to £630 per tonne in Europe.
As a direct result Tate & Lyle has had to reduce its yearly output of sugar from 1.1 million tonnes until 2009 to 700,000 tonnes. And last year 30 workers were laid off, while production now operates five days instead of seven days a week – after the company lost more than £32million.
Sugar cane Vs sugar beet
Sugar cane is the world’s tallest crop, a giant grass measuring from 6-19ft tall. It grows in tropical and semitropical regions.
Sugar beet is a root crop, rather like the parsnip, which grows in temperate climates in Europe.
France and Germany are among the largest producers.
But with 850 workers the factory is still Newham’s second largest private employer after London City Airport – in what’s has been reported as Britain’s worst unemployment blackspot.
The company’s vice president Gerald Mason said: “In the long term we won’t be able to survive unless both the import quotas and duties on sugar cane are unshackled.
“We are not asking for preferential treatment. It’s not that we think sugar cane is better than sugar beet, we are just asking to be able to trade under fair terms.
“It is hard for staff here to understand when they have done their best to make the factory efficient and they are all highly skilled.
“Some of them are from families who have worked here for generations going back 100 years.”
But the problem goes back even further than the EU according to Mr Mason. He said: “The problem started back in the 1800s when there was a shortage in the import of cane sugar to Europe because of the many wars.
“Scientists then invented a way of extracting sugar from beet. Ever since then there has been an uneasy balance in the market and in policy between the two types of sugar. Our method is the traditional one, while sugar beet is the newcomer on the block and we get trapped in the system.”
Mr Mason also said that the policy is unfair against developing countries.
He said: “Sugar cane helps link some of the world’s poorest countries to the market place and gives consumers a choice.”
Despite sugar cane travelling across the world and up the Thames in large ocean vessels to reach Silvertown, Mr Mason says the environmental footprint is actually much less than then carbon footprint left behind by the large trucks carrying sugar beet across Europe.
He added: “Only 15 per cent of the plant is used for sugar, the rest is fibre which is used to power the mill.”
And if the factory goes under it will not only affect workers at the factory.
“We are one of the largest users of the Thames and a downturn for us would also affect the Port of London and the viability of the river if it is not used as much,” Mr Mason said.
The problem is also that sugar beet growers cannot meet all Europe’s needs and if the British cane sugar industry goes down prices will rise even further, he said.
The coming months are going to be crucial in trying to reform the CAP policy for the period between 2015 to 2020. The company has had to dedicate a team of three people who are trying to lobby EU officials.
Mr Mason said: “We are getting more allies from other member states such as Italy, Bulgaria, Romania, Portugal and Finland. And we’re hopeful that people are beginning to understand reform is urgently needed.”
East Ham MP Stephen Timms, has also been active in trying to argue the company’s case both at home and in Brussels.
Mr Timms, who is also shadow minister of state for employment said: “There has been a series of decisions in recent years which have given sugar cane refineries an unfair playing field compared to the sugar beet industry.
“If the CAP is not reformed then there is a very real risk to the future of Tate & Lyle, which I care deeply about. The factory is very important to employment in Newham.
“There are sugar beet producers in the UK as well. But it important that there is fair competition and in would be in nobody’s interest if end up without a sugar refining industry.”