16 October 1998

BS fined £28m for cartel scam

BRITISH Sugar has been fined £28m by Brussels for its leading role in restrictive trade practices in the industrial and retail sugar markets in the late 1980s.

Following a lengthy investigation, the Commission this week said British Sugar had initiated discussions with its main rival, Tate & Lyle, in June 1986 with a view to "a collaborative strategy of higher pricing".

A further 18 meetings took place until July 1990, also involving brokers Napier Brown and James Budgett in relation to the industrial market. Another eight meetings were held in which British Sugar and Tate & Lyle discussed their retail pricing policies.

"While the Commission does not have evidence that prices were jointly fixed, the systematic participation of all four parties led to an atmosphere of mutual certainty," claim the investigators.

The heaviest fine is being imposed upon British Sugar. Tate & Lyle faces a more modest penalty of £4.9m, in part because it submitted two self-incriminating letters to the investigation effectively proving the cartels existence.

British Sugar points out that the events in question took place under previous management, before the company was acquired by Associated British Foods. It also maintains prices were never affected by the meetings.

It will be appealing against the decision, but says there will be no consequences for producer beet prices which are governed by the Inter-Professional Agreement.

A spokesman for Tate & Lyle said his company was surprised and disappointed by the size of the fine – "especially since we were the ones who blew the whistle in the first place." &#42