| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

News Main Page 
 Asia-Pacific Business Week


How to use our RSS feed

Web Finfacts


Finfacts is Ireland's leading business information site and you are in its business news section.

We provide access to live business television and business related videos from: Bloomberg TV; The Wall Street Journal; CNBC and the Financial Times. Click image:


Finfacts Homepage

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News





Analysis/Comment Last Updated: Dec 19th, 2007 - 13:17:15

Comment: EU Sugar Compensation Fund - Greencore, beet farmers and taxi drivers
By Michael Hennigan
Jul 9, 2006, 11:16

Email this article
 Printer friendly page

Sugar beet was not used as a commercial source of sugar until the second half of the eighteenth century, when a German scientist discovered a technique for extracting sugar from the beet. Horatio Nelson's victory at Trafalgar in 1805 was followed by a blockade which cut off continental Europe from cane sugar. Napoleon decided in 1811 that sugar beet was henceforth to be the source of sugar for Europe. Thereafter cane sugar and beet sugar developed in parallel and often in competition.
Last August, the EU reported that
Ireland's net receipts from the EU Budget rose by €34 million to €1.594 billion in 2004.

The Irish at €396 per capita in net receipts from the EU, were the highest in the pre-May 1, 2004 enlargement EU15, while the Dutch headed the net payers at €125 per head. Greeks benefited by €377 per capita, Portugal by €298 and Spain by €200. Germany paid $87 per capita into the EU Budget.

We are still in the money and there is an extra €145 million from an EU compensation fund that was set-up when sugar market rules were changed last year, following a World Trade Organization ruling.

There is no controversy in Ireland about the provision of compensation. Why would there be as others are providing the funding. There is however a dispute about the division of the spoils.

Beet  farmers and the Irish sugar industry owner Greencore Plc have much greater political clout than lower income taxi drivers who had to prove  "extreme personal financial hardship," to get financial help, following deregulation of the industry.

The Minister for Agriculture Mary Coughlan will announce her decision this coming week on whether food group Greencore will get the 90 per cent share it claims from the EU compensation fund, or do the Irish Farmers' Association's bidding, by giving most of it to beet farmers, many of whom are farming the best land in the country.

Taxi Deregulation

Irish taxi drivers have received over €17 million in compensation from the Government as a result of the deregulation of the industry, following a High Court ruling in 2000.

Over half of all those who held licences at the time the cap on taxi numbers was lifted, have now received a payment from a hardship fund.

Taxi driver families' lobby group, Families Advocate Immediate Redress (FAIR), claimed that entrants to the industry before it was liberalised had paid in excess of €100,000 for a taxi licence.

The average hardship payout has been just over €11,500.

Nearly 1,500 licence holders have qualified for the payments. However, the Government says payments under the scheme do not represent compensation but rather "compassionate payments in respect of extreme personal financial hardship".

Applicants had to show that they had suffered extreme personal financial hardship and loss of income from the liberalisation of the taxi licensing system. Before deregulation there were 2,722 taxi licences in the country.

Some 1,927 applications were received and a total of €17,268,000 has been paid out to 1,498 claimants. Approval in principle for a payment has been made in four cases, pending the submission of further information but 340 applications were rejected. Another 94 applications were closed when the applicant did not submit the documentation required.

The EU Sugar Compensation Fund

Mallow sugar plant
The closure of the Irish sugar industry provides Greencore with a bonanza from well positioned property sites and last February,
independent consultants, recommended that farmers should get €106m from the €145 million compensation package.

Deloitte Financial Advisers, commissioned by the IFA to assess beet growers’ losses arising from EU sugar reform, concluded that their total loss amounts to €150 million.

Presenting the findings, IFA President Padraig Walshe  said that there was an incontrovertible case for payment of the EU compensation to the country’s 3,700 growers and contractors, who will lose their livelihoods. Walshe said “it is now a matter of political will to determine the allocation of the €145m of EU funds available to Agriculture Minister Mary Coughlan.”

If Coughlan agrees to grant €105 million to beet farmers, it will give them an average of €28,378 per farmer.

Beet growers will also benefit from a separate €123m payout over the next seven years. The farmers will get compensation of €9.60 per tonne of beet previously produced, even though they won't be growing beet anymore.

Last week, Liam Carroll, the property developer, spent €170 million buying a 21.57 % stake in Greencore from financier Dermot Desmond. It is reported that Carroll is likely to re-enter the market for Greencore shares to build up his stake in the company towards the 29.9 per cent level that would trigger a mandatory bid.

Carroll's stake is already big enough to block any rival bidder from compulsorily acquiring his shares. However, it is reported that it will not be sufficient to secure control of Greencore's valuable property portfolio, the objective of his interest in the company.

Greencore has 200 acres of prime property in Carlow, on the site of the former sugar factory, an extensive site at Littlehampton near Gatwick Airport in London and a prime site in Mallow, Co. Cork.

Buying the company outright would cost more than  €800 million. However, Carroll is wealthy enough to do it.

Greencore's properties have a book value of only €40 million and it is reported that the Carlow site alone is worth €150 million.

Liam Carroll isn't apparently interested in selling food and whatever the validity of the beet farmers' claims may be, Greencore is a winner already. 

© Copyright 2007 by Finfacts.com

Top of Page

Latest Headlines
Dr. Peter Morici: The Federal Reserve needs more than a new Communications Strategy
The Irish Mind and the Knowledge Economy: Should we bank everything on fuzzy leprechaunic political dreams?
Dr. Peter Morici: Why the US Trade Deficit matters?
Dr. Peter Morici: US Recession Watch, the Jobs Report and Fed Policy
Dr. Peter Morici: Business as Usual: the Energy Bill, Subprime Mess, and Recession Watch
Dr. Peter Morici: China’s Dragon does not flinch and Bernanke’s Toothless Dog
Cabinet decision to defer Irish ministerial pay hikes until 2009 seen as empty gesture after weeks of controversy
Dr. Peter Morici: President Bush's Mortgage Program and Rumblings from Europe about the Dollar
Dr. Peter Morici: Avoiding a US Recession
Christmas Fear and a proposed German Minimum Wage - Prof Hans-Werner Sinn
Nine months after ISEQ record highs, Irish shares likely to underperform other markets for sometime
Dr. Peter Morici: An Emergency Interest Rate Cut? and The Week Ahead: Forecasts for the Weeks of November 26 and December 3 (preliminary)
Germany: How the Upswing Came About - Six Hypotheses - - Prof. Hans-Werner Sinn
Dr. Peter Morici: The Limits of US Federal Reserve Policy
Dr. Peter Morici: US Stock Prices and the Trade Deficit; Forecasts for the Weeks of November 12 and November 19
Dr. Peter Morici: US Economy adds 166,000 employees in October; While ranks of the Self Employed fall: Credit Crisis grows, Bernanke’s credibility suffers
Dr. Peter Morici: The Fed's Misstep, and Forecasts for the Weeks of November 5 and November 1
Dr. Peter Morici: The Falling US Dollar and the Stubborn US Trade Deficit
Where is the Outrage? Gombeenism thrives at home while in Paris, OECD staff work on proposals for Irish public service reform
Dr. Peter Morici: Why Bernanke should Cut Rates and Forecasts for the Weeks of October 22 and October 29