Greencore chief executive Patrick Coveney said yesterday he believed the sugar industry would never be restarted in Ireland because it did not make financial sense. However, his view was rejected by Beet Ireland, a group of farmers who are advancing plans to resume sugar production as soon as beet quotas are abolished.
In 2006 the EU introduced a temporary restructuring scheme for the sugar industry, offering incentives for less-efficient countries to exit the sector. Sugar processor Greencore said the changes to the sugar regime would result in unacceptable losses and it shut its Mallow facility with the loss of 320 jobs. It received €127 million in compensation, while beet growers got €220 million and machinery contractors received €6 million.
A report by the European Court of Auditors in 2010 found the closure of the factory had been needless because the business was profitable at the time.
Sugar beet quotas are expected to be abolished between 2017 and 2020, clearing the way for countries like Ireland to re-enter the sector.
Mr Coveney said there was "understandable emotion" about reviving the sugar industry but this overlooked key facts. "Sugar beet yields are awful relative to France. You get more than twice as much sugar from the equivalent sugar beet farm in France [compared] to what you get in Ireland," he said. Distribution costs were also very high, and there were "extraordinary levels of investment costs".
Not surprised
Beet Ireland spokesman Pat Cleary said he was not surprised that Mr Coveney had that view because Greencore had never been enthusiastic about the sugar industry.
"His brother Simon Coveney [Minister for Agriculture] is after working hard to ensure that quotas are abolished in 2017. We are working away with that deadline in mind. We are 100 per cent confident there will be a sugar industry in Ireland again, and Beet Ireland will deliver the processing facility for it."
Mr Coveney was speaking at the launch of the first all-island agri-business survey by the Irish Farmers Journal and KPMG. The survey of 100 agri- business leaders found that almost 72 per cent of agri-business companies expected growth in their businesses this year. Almost half of the companies surveyed said they planned to create jobs this year.
