Bitter end for sugar cash cow

Ireland's last sugarbeet manufacturing facility closed on 12 May. The winners and losers in this political/business drama are clear.Like all messy endings, the majority of people – and their political and media representatives – prefer to avert their gaze. The sight of corporate raiders and their acolytes sharpening their knives and preparing to feast on the flesh and entrails of the once proud beast is unsightly.

EU taxpayers should observe how their money is being spent. Make no mistake: the decision to close our industry was political. The central European states felt they could survive in competition with sugarcane producers by eliminating sugarbeet producers in peripheral countries. The EU Commission agreed, targeting Ireland among others. For the first time, EU policy provided the stick of severe future price and quota cuts, and the sugar-coated carrot of hefty financial compensation to get out now.

Greencore could hardly wait to close down Mallow. It is obvious the company wanted out of primary production and the hassle of dealing with farmers.

No other country has decided totally to cease production. Their industries are willing to take the cutbacks and factory closures, living with lower prices in the hope that future markets will improve, or are converting factories to bio-ethanol production.

The Government, Greencore and the Irish Farmers Association had no strategic plan in advance of their negotiations. There was no political will to maintain what was once the flagship and symbol of political independence for the fledgling Irish State.

The biggest loser is the rural economy in general, and tillage farmers in particular. At the farm gate, it was worth €75-€80 million per annum. No other crop – no matter how hyped – will replace a quarter of this annual amount. Most growers will be forced out of tillage farming. Compensation and single farm payments will cushion the blow for seven years. A suggestion that they may be slightly better off not growing was a factor in splitting them into factions at a critical point. After the next reform of the Common Agriculture Policy budget, these payments will cease or be reduced.

Some 350 people have lost their jobs, joining approximately 1,200 pensioners looking nervously at the pension fund being looted by financial whizz-kids in sharp suits operating in another country, aided by their consultant cronies anxious to grab any gobbets of the fifth quarter not already pocketed.

The EU legislation is clear in its intent, introducing in Council Regulation (EC) No 320/2006 the concept of Restructuring Aid, creating an incentive to abandon sugar quota while facilitating “redeployment of the workforce” through “a social plan detailing the actions planned in particular with respect to re-training, redeployment and early retirement of the workforce concerned”.

From a staff perspective, Greencore has been as greedy and mean-spirited in its approach to the shutdown as it has been incompetent in managing the cash cow which fell into its lap after the removal of Chris Comerford, who transformed the semi-state into a profitable plc. By 12 May, staff had only got statutory redundancy. Clarification from the Labour Court was too late, and we can only hope more will be paid.

Sugar, soft drinks and confectionary will not be cheaper for consumers. The profit is being taken from the farmer/producer and given to multinational food conglomerates and retail giants.

Greencore is the winner here. Agriculture Minister Mary Coughlan has the final say in approval of the plan for closedown and drawdown of compensation of €145 million. Greencore appears confident that she will agree to whatever they present.

The shareholders are happy; after years of stagnation, shares have risen 30 per cent in six months to a five-year high of €4. This may be due to the properties associated with the factories.

Greencore may have won the financial race, but has lost the PR game, leaving a bitter aftertaste with farmers, employees and the public. After Eircom and Irish Sugar, next will be Aer Lingus (remember “Golden Shares”?), followed perhaps by Coillte (state forests), and maybe then our Government will sell off Heritage sites?

Dermot Grogan is a recently redundant sugarbeet scientist