Commission fines IRISH SUGAR for abuse of its dominant position on the Irish sugar market

In a decision which finds that the company has infringed and abused its dominant position (Article 86 of the EC Treaty), the Commission has imposed a fine of 8.8 million ECU on Irish Sugar plc, a subsidiary of the Greencore Group.

The decision against Irish Sugar concerns a series of infringements since 1985. Irish Sugar is the sole processor of sugar in the island of Ireland and has a share of around 95% of the sugar market within Ireland. The decision states that Irish Sugar has abused its dominant position on the Irish sugar market by seeking to restrict competition both from imports of sugar from other Member States and from small sugar packers within Ireland.

In the late 1980s Irish Sugar and its subsidiary Sugar Distributors Limited (SDL) sought to restrict competition from imports of sugar from France and Northern Ireland by offering selectively low prices to customers of an importer of French sugar, swapping Irish Sugar's own Siucra brand of packaged sugar for an imported brand and offering selective "border" rebates to customers for packaged sugar that were located close to the Northern Irish border.

Since at least 1985 Irish Sugar has offered rebates on purchases of bulk sugar to industrial customers that export part of their final product to other Member States. These "sugar export rebates" vary between customers for the same tonnage of sugar and vary over time without any consistent relationship to sales volumes or currency changes. Both the practice of offering sugar export rebates and the ad hoc manner in which the scheme is administered discriminates against customers that supply only the Irish market. The system of rebates on exports to other Member States also distorts the common sugar regime.

Since 1993 Irish Sugar has sought to restrict competition from small sugar packers within Ireland by discriminating against them in the prices that it has charged for bulk sugar, thereby placing them at a competitive disadvantage relative both to other customers and Irish Sugar itself. Irish Sugar has also offered rebates to certain wholesalers and food retailers that have been dependent on increases in their purchases of Irish Sugar's own Siucra brand, thereby making it difficult for small competitors to gain a foothold in the market.

Through its infringements Irish Sugar has been able to maintain a significantly higher price level for packaged retail sugar in Ireland compared with that in other Member States, notably in Northern Ireland, and has been able to keep its ex-factory prices, particularly for bulk sugar for "domestic" Irish consumption, amongst the highest in the Community, to the detriment of both industrial and final consumers in Ireland.

In setting the level of the fine the Commission has taken into account the fact that the infringements represent a serious breach of Community law, that several have been recognised as abuses of a dominant position by the European Court of Justice and that they have taken place over a long period of time.

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