NFU Sugar has written to Defra farming minister Mark Spencer asking his department to urgently intervene in the ongoing sugar beet pricing row.

In a letter sent to Mr Spencer, president Minette Batters said the union is “shocked and deeply frustrated” that, following months of negotiations, British Sugar has failed to agree terms for the supply of sugar for the 2024-25 contract year.

The NFU said it entered the negotiations in good faith, but is angry that earlier this week British Sugar instead decided to approach growers directly with a unilateral beet contract offer worth £38/t.

See also: British Sugar makes pre-emptive offer of £38/t for next season

British Sugar, which is the sole buyer and processor of UK sugar beet, has notified growers that they will be able to enter into these contracts from Monday 6 November.

Mrs Batters wrote: “This is in total disregard for the integral role played by the NFU in these negotiations, and is a violation of the vital protection which the NFU provides to growers, who are now left vulnerable as price takers to the only buyer in the market.” 

She accused British Sugar of acting as a monopsony, and says its actions are an “abrupt and unprecedented departure from the established practice for the negotiation of sugar supply terms, which has been in place for many decades”.

Defra referral

Because the NFU and British Sugar have been unable to agree on the price and other terms and conditions for the supply for sugar beet, the NFU has referred the case to Defra under Section 69 of the Food Act.

This grants ministers the power to determine or designate a person to determine those prices, terms and conditions.

Mrs Batters described the manoeuvre by the processor as a “crisis” requiring an urgent resolution, which will only be achieved by 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 (1) – the CMO Regulation – and the invalidity of contracts formed on the basis of British Sugar’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 to determine the terms for the supply of sugar beet for the 2024-25 contract year.

British Sugar told Farmers Weekly it remains committed to working through the negotiation process with the NFU and its hopes this can be concluded swiftly.

A spokeswoman said the company will honour any negotiated outcome for growers who sign up now. “If the commercial terms reached change, we will of course offer all growers the right to move to those new terms,” she added.