22 November: Important update regarding 2024/25 sugar beet contracts
British Sugar will be temporarily pausing contracting and seed ordering for the 2024/25 beet contract from 10am on 22 November 2023.
This is in order to help facilitate negotiations with NFU Sugar and endeavour to agree prices and terms for next year’s contract.
British Sugar and NFU Sugar have agreed that negotiations will recommence this week, aiming to agree a contract for next year as soon as possible.
15 November: Growers invited to write to their MP
UK sugar beet growers have been invited to write to their constituency MP urging that they approach Defra and request immediate intervention in two areas:
- That Defra determines the terms for the purchase of sugar beet by British Sugar with respect to the 24/25 growing season, as it is empowered to do under s.69(1) of the Food Act 1984; and
- That Defra strengthens the relevant legislation to avoid a repeat of the current crisis in the sugar sector.
Currently, more than 500 letters have been sent.
7 November: Defra issues statement
NFU Sugar has clarified its response to a statement issued by Defra regarding the 2024/25 sugar beet contract negotiation.
NFU Sugar welcomes the clear direction from government that negotiations with British Sugar to set a price for sugar beet this year should resume.
You can read Defra's statement in full at: GOV.UK | Update on beet sugar negotiations.
The government has stated explicitly “that there is a well-established process in place to agree the sugar beet price”. Defra adds: “It is very important that all parties involved now continue to follow that process and reach a mutually acceptable outcome.”
The government’s direction could not be clearer.
When British Sugar retracts its current sugar beet contract offer made to growers outside of the established process, NFU Sugar is ready to resume the negotiation process that the company bypassed last week. But that price-setting process cannot function effectively whilst British Sugar is, at the same time, making unilateral offers to beet growers outside of it.
We expect British Sugar to adhere to government’s direction and return to the negotiating table in good faith.
3 November: NFU Sugar writes to the Farming Minster
NFU Sugar has written urgently to the Farming Minister, Mark Spencer MP, asking for the following immediate interventions by Defra:
- A statement to industry ahead of Monday 6 November confirming both the NFU’s vital role under Article 125 of Regulation EU 1308/2013 (the “CMO Regulation”) and the invalidity of contracts formed on the basis of BS’s unilateral contract offer.
- Amendments to the CMO Regulation to avoid a repeat of the crisis in which we now find ourselves.
- The exercise of statutory powers under section 69 of the Food Act 1984 (“the Food Act”) to determine the terms for the supply of sugar beet for the 2024/25 contract year.
NFU Sugar held an emergency meeting on Friday 3 November, where more than 800 growers attended, representing over half of all sugar beet grown in the UK.
1 November: NFU Sugar chair and vice chair respond to British Sugar unilateral offer
On Wednesday 1 November, British Sugar contacted all growers with a document which asserted to contain details of the 2024/25 Sugar Beet Contract Offer.
In response NFU Sugar Board chair Michael Sly said: “We are outraged that British Sugar contacted all growers earlier today and provided growers with a document which asserts to contain details of the 2024/25 Sugar Beet Contract Offer.
“NFU Sugar has not agreed this offer, leaving the validity of any contract made in relation to this offer in doubt. Further updates will be issued as a matter of urgency.”
The NFU Sugar Board believes that this aggressive action – in circumventing NFU Sugar – was undertaken in the hope that individual growers will accept a contract that gives them significantly less value than they should receive given anticipated market conditions.
“We are outraged that British Sugar contacted all growers earlier today and provided growers with a document which asserts to contain details of the 2024/25 Sugar Beet Contract Offer.”
NFU Sugar Board chair Michael Sly
Thus, enabling British Sugar to retain significantly more of the higher profits we believe they will earn in the 2024/25 period.
The Sugar Board remains outraged that British Sugar should do this rather than continue to work within the agreed process with growers’ representative body, NFU Sugar.
Key information for growers
NFU Sugar has been contacted by many growers who have raised various questions and concerns about British Sugar’s communication. While not recognising the validity of the contract terms presented, the board believes it is important growers are aware of the following:
- There are many caveats, terms and conditions in British Sugar’s offer contained behind QR codes.
- NFU Sugar understands some growers have been told by British Sugar account managers that the difference between British Sugar’s offer and NFU Sugar’s position is only £2/t and if they contract early they will have access to better yielding seed that would more than make up this difference. To be clear, NFU Sugar is fighting to deliver a package that has much greater value than this to growers, in properly sharing the extra revenue British Sugar is due to make from the extremely high forecast global sugar prices in the 2024 contract period.
- Despite the claims in the seed information pack, this was not approved by the NFU representatives on the seed working group and differs substantially from what had been agreed. For example, it fails to include the results of four years of work by BBRO (British Beet Research Organisation) supported by both NFU and British Sugar on pellet performance.