For the avoidance of doubt, NFU Sugar has not agreed the offer British Sugar has today communicated to growers, leaving the validity of any contract made in relation to this offer in doubt.
However, be assured your collective voice has been instrumental in your negotiating team making the significant progress we have. Disappointingly, as yet we have not been able to conclude a deal, as British Sugar is, in our view, refusing to accept that growers must know the terms of each part of the contract they are signing up to, as explained in more detail below.
Furthermore, British Sugar failed to mention that we had also aligned on seed orders being reset to zero to give every grower the same opportunity to order seed as usual and frost insurance being funded by British Sugar on the same policy terms as last year.
The offer we have made has always been contingent on every element of the contract being aligned, as growers must be able to make an informed choice between all the options. We are only aligned with British Sugar on the other points in the contract subject to alignment on the terms of the futures linked contract, which have not been agreed.
Futures Linked Contract
Growers have been clear in their desire for greater economic empowerment, which the futures linked contract delivers. We have therefore repeatedly made clear to British Sugar that the futures linked contract is an integral part of our package. We have maintained that growers must have the opportunity to opt for a meaningful exposure to the upside in the market, which we recognise could also mean exposure to the downside.
In our view, it is essential to us that growers always know what they are signing up to, whether on the futures linked contract formula or any other term. As such we must come to agreement on the factor to be used in the formula.
Furthermore, the outstanding points of disagreement on the futures linked contract (the ability for growers to place up to 50% of their CTE onto it, and the principle of agreeing a factor before growers sign up), are both elements British Sugar offered to us recently and has since withdrawn.
As things stand, British Sugar has stated that they will now move to the arbitration process, notwithstanding that we believe the costs of an arbitration will far outstrip the cost to British Sugar of agreeing to the outstanding points.
NFU Sugar Board chair’s statement
NFU Sugar Board’s chairman Michael Sly said: “With the outstanding disagreement on the contract of such small financial cost to British Sugar and yet critical to the full benefits of the contract being realised, we are astounded that British Sugar would choose to move to a costly arbitration process in preference to reaching agreement on this.
“We have only achieved the significant progress we have made with British Sugar because of the overwhelming unity and support we have had from growers. More than 1,300, representing over 70% of the national sugar beet tonnage, have pledged their support for the vital role NFU Sugar plays in securing a fair sugar beet price for growers. Last week, hundreds of growers attended NFU Sugar meetings to voice their support, and well over 500 letters have been written by growers to their constituency MPs on this issue.
“British Sugar can be in no doubt of the strength of feeling amongst beet growers and support for NFU Sugar as the growers’ collective representative body.”
