Farmers in protest over Greencore price for beet

BEET farmers picketing the Dublin headquarters of Greencore yesterday threatened they would boycott the company's products, and even launch a "no grow" campaign if they are not given a substantial price increase.

IFA leaders said beet farmers were "angry and frustrated" at the company's "totally negative attitude to our demand for a £5 per tonne price increase." The managing director of Greencore's Irish Sugar subsidiary, Mr Tony Heaphy, said the company was paying "a very fair price" for beet. Greencore is expected to have a good sugar beet crop this year, with a higher sugar content than last year.

Between two and three hundred farmers turned up for yesterday's picket, on the first day of this year's harvesting season. The sugar factory in Carlow went into production yesterday and the Mallow plant begins processing today.

"I am appalled at the intransigence of the sugar company in negotiations, confirming my worst fears about Greencore's monopoly position in the industry," said IFA president Mr John Donnelly.

"Greencore is making £47 million (profits) and we'd like a share of it," said beet farmer Mr Michael Dempsey, from Castledermot, Co Kildare.

IFA spokesmen said farmers profit margins were being eroded while the Greencore sugar division was making "super profits." The influence of growers had declined rapidly since the privatisation of Irish Sugar, they said. A series of growers' meetings organised by the IFA is now taking place around the country and the next move in the farmers' protest will be taken when it is complete.

"We will seek out a weapon that could cause hurt to the company," said Mr Martin O'Regan of Belgooly, Co Cork, chairman of the IFA's sugar beet section.

"There can be no question of growers accepting lower prices while the processing industry continue to make super profits."

Mr Heaphy, for Irish Sugar, said the price the company was paying for sugar was ahead of that being paid by other companies selling sugar on the Irish market.

"The claim they are making would put our raw material price out of line with that of our competitors and I think the farmers understand that." A false expectation of a price increase had built up this year but the basis of the claim was not justified, he said.

Asked about the farmers' threat of boycotting Greencore farm input products, Mr Heaphy said the company's response would be to continue to offer those products at a fair price.

The current price of sugar beet, which is constructed from an EU dictated price and a locally negotiated premium, works out at around £40 per tonne net. Price increases in recent years have been the result of devaluation of the Green Pound.

A food industry analyst who spoke to The Irish Times said the profitability of the Greencore sugar division was comparable with that of other efficient European sugar producers.

While Greencore's sugar division had an operating margin of around 17.5 per cent, British Sugar had a 19 per cent plus margin. Danisco of Denmark has margins of around 17 per cent, while Cultor, of Finland, has margins of just under 18 per cent.

Sugar production was a very capital intensive industry, said the analyst, who did not want to be named. "Sugar beet is the second most profitable form of farming, after dairying", he said. "However I'm not necessarily saying that the farmers have no case."