Greencore today announced an end to its sugar division and the closure of the only surviving sugar processing factory in the State.
Around 330 employees at the plant in Mallow, Co Cork are being told of the move this afternoon. The factory is expected to close in May.
In a statement Greencore said the decision of the EU Council of Ministers last November had effectively spelled the end of sugar beet growing and processing in Ireland.
Chief executive David Dilger said that since the EU sugar regime change was announced an efficient and profitable operation has been turned into a loss-making processing business with no viable future.
However, the company has said it has enough stocks of sugar to service Irish industrial sugar and retail customers for around eight months and is putting plans together to supply customers under the Siucra and McKinney brands after November.
Greencore generated operating profits of around €25 million from sugar processing in the year ended September, 2005. In the current financial year, operating profits from sugar processing are expected to fall to €15 million.
President of the Irish Farmers' Association, Padraig Walshe said much of the blame for the demise of the Irish sugar industry rests with Greencore.
Mr Walshe said that over the past ten years, Greencore had drained over €300 million in profits from Irish Sugar without planning for a viable future for the industry.
"Greencore completely misread the EU Sugar regime and the reforms of November 2005. Closing Carlow was a fatal misjudgement by Greencore management which has staggered from one crisis to another since."
Mr Walshe said it was a black day for the country's 3,700 growers and Irish farmers. IFA Sugar Beet Committee Chairman Peadar Jordan said the Minister for Agriculture must not give Greencore a cent in compensation.
A row has been brewing for several months over who would receive the bulk of the €145 million EU temporary restructuring fund.
Greencore said, following legal advice, that it was entitled to 90 per cent of fund amounting to €131 million. It said the remaining 10 per cent (€15 million) should be reserved for Irish beet growers and machinery contractors.
However, the IFA, which represents 3,700 sugar beet growers, has demanded that €106 million of the fund should be made available to beet farmers. The organisation produced a Deloitte report which said growers face a total loss of €150 million because of the EU reforms.
SIPTU's National Industrial Secretary, Gerry McCormack, described the decision to close the company as a disgrace.
"It is a national disgrace, a regional disaster and a local and community catastrophe for the workers who will be placed on the scrap heap as a result of the death of the sugar industry in Ireland," Mr McCormack said.
"The decision to cease sugar production comes as a direct result of the Government's and Minister for Agriculture, Mary Coughlin's decision to pander to the farming lobby to seek compensation for farmers instead of securing the jobs of nearly 300 workers employed in Irish Sugar," Mr McCormack added.
Speaking on RTE radio this evening Minister Coughlin blamed lower sugar prices worldwide for the need to reform EU prices.
"Farmers indicated to quite categorically that on the basis of the price that's been proposed, they could not produce sugar," she said. "On the basis of that there would be no raw material for the sugar company," she said.
The minister pointed out that Ireland was not the only country suffering sugar plant closures, with Latvia, Denmark, Italy and Spain all closing sugar factories because they were not in aposition to compete.
"The burden is all the more difficult for us in Ireland as we only had one sugar processing factory."
The minister shied away from questions about possible compensation for Greencore; the sugar firm has requested 90 per cent of the available funds, but farmers are adamant that they should receive nothing.
At least 10 per cent of the restructuring fund will be made available to farmers and sugar producers, the minister confirmed. Submissions will be taken from all parties.