An application by Associated British Foods' unit British Sugar to give up permanently a 165,000 tonnes UK sugar output quota from October has been accepted by the state-run Rural Payments Agency, ABF said. This is 13.5 percent of the UK national quota set by the EU.
The total amount of permanent quota given up across the EU is expected to be announced by the European Commission in the coming weeks, ABF said in a statement on Wednesday. The compensation will be 93 million euros (69 million pounds), payable to British Sugar in two instalments of 31 million euros by June 2009 and 62 million by February 2010.
"We are pleased that the government has accepted our recent application," British Sugar Group CEO Mark Carr said. "These steps have unfortunately proved necessary following recent modifications to the EU sugar reform regulations, which now require all European industries to renounce quota regardless of their efficiency," he added.