European Council to offer refunds on excess sugar levies

By Will Chu

- Last updated on GMT


Related tags European union

The European Council has agreed to reimburse levies imposed on sugar producers after a decision by the European Court of Justice (ECJ) that ruled the excess sums had been incorrectly calculated.

The regulation adopted by the Council refers to payments made by sugar producers and beet growers between 1999 and 2001.

These reimbursements will dent the EU budget to the tune of €195.3m, made up of €93.1m for the levies and €102.2m for estimated interest costs.

“I am pleased to announce that the decision enables us to put right the wrongs of the past and ensure that those sugar producers who were over-charged are fully refunded,” ​said Rumen Porodzanov, minister of agriculture, food and forestry of the Republic of Bulgaria and President of the Council.

ECJ ruling

According to the official Council regulation, the instruction will enter into force on the day following its publication in the Official Journal of the European Union.

The regulation will also apply from the 13 October 2000, as regards the 1999/2000 marketing year and 12 October 2001, as regards the 2000/2001 marketing year.

“The revision of the production levies for the 1999/2000 and 2000/2001 marketing years will affect the amount payable by the sugar producers to the beet growers,”​ the ruling stated.

“This is in respect of the difference between the maximum amount of the A or B levy (i.e. 2 % or 37.5 % of the intervention price for white sugar, respectively) and the amount of these levies charged for the marketing years concerned.”

The ruling takes instruction from the ECJ’s judgement on the 9 February 2017, in which the Court declared Regulations (EC) No 2267/2000 and (EC) No 1993/2001 invalid.

The Common Agricultural Policy

The common market organisation (CMO) in the sugar sector was set up in 1968 with the aim of ensuring a fair income for EU producers and self-supply of the EU market. Since then it has been periodically reviewed.

In order to support European growers and processors, the sugar sector was originally subject to price support and production quotas that ended on 30 September 2017.

The decision bought an end to production caps on sugar beet, which was restricted to 13.5m tonnes in order to guarantee minimum prices to farmers.

It also meant Europe was free to export sugar around the world. Up until then the region had to import sugar to meet demands.

“Producers will now be able to adjust their production to real commercial opportunities, notably in exploring new export markets,”​ ​the European Commission said.

“It also means fewer administrative burden for operators, growers and traders.”​

Other types of sugar were also subject to production caps. Isoglucose (high fructose corn syrup) was limited at 0.72m tonnes.

Inulin syrup had a zero production quota, meaning industry was effectively banned from producing it.

“The end of quotas therefore provides new opportunities [for inulin syrup] if the market is there,”​ said the Commission.

Sugar levies were inherently linked to the sugar quota regime. Under the CMO rules, producers overshooting their quota had to pay a surplus levy on such quantities. These levies were then paid into the EU budget.

The full text of the Council Regulation on sugar levies can be accessed here

The ECJ judgement dated 9 February 2017 Case C-585/15 can be accessed here

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