Madam, – It is right that business correspondents should seek to hold company managements to account, but in criticising Greencore’s decision to close its Mallow factory on the strength of a remark in the European Court of Auditor’s Special Report on the EU sugar reform your correspondent John McManus (Business Opinion, January 10th) is simply playing to the gallery.
The plant was indeed technically efficient, but a sugar plant needs sugar beet to sustain a campaign. Mr McManus failed to point out that the sugar reform meant that the institutional price underpinning the price beet growers were paid would reduce from €47 to €26 per tonne. Few Irish beet growers would be willing to supply beet to Mallow at that price.
The reference to the reform being based on out-of-date data is a red herring. The Commission did not direct plants in less efficient areas of the EU to close. The decision to remain in production or not was a voluntary decision made by each sugar plant in the light of the lower institutional prices for sugar.
The loss of the sugar industry was regrettable, but producing sugar in the Irish climate was never profitable in the absence of significant support and protection. The 2006 sugar reform reduced that support to the point where the industry was no longer viable. – Yours, etc,