Greencore given access to State documents

A High Court judge has directed that Greencore should be given all documents related to the Government's decision on how the company should allocate €145.5 million in restructuring aid following the rationalisation of the European sugar industry and Greencore's withdrawal from sugar production here.

Mr Justice Peter Kelly yesterday admitted the challenge by Greencore to that Government decision into the Commercial Court list and made directions relating to the exchange of legal documents between the sides.

Among the documents to be given to Greencore include a report prepared for the Government by Indecon economic consultants on the consequences for various interests of the Greencore withdrawal from the sugar industry.

The Government side is also to be given a copy of Greencore's proposals as to how the restructuring aid should be allocated, the judge directed.

That plan was submitted by Greencore yesterday, which was the deadline date, and its proposals are expected to differ fundamentally from those advanced by the Government.

After making the directions, the judge returned the proceedings to October 6th.

On Friday, Greencore secured leave to bring proceedings alleging unlawful interference and objective bias by the Government in directing how the company should allocate the €145.5 million in EC restructuring aid.

Greencore says it was "appalled" by the Government's decision of July 12th that €47.1 million restructuring aid go to sugar beet farmers and contractors, €28.4 million to employee redundancy payments in line with Labour Court recommendations, €20 million for environmental and demolition costs and €50 million for pension fund requirements and other payments in order to demonstrate a "sound economic balance" between the elements of the restructuring plan.

It claims the Government's decision is "fundamentally legally flawed" and in breach of relevant EC regulations adopted to give effect to the reform of the sugar regime in the EU.

The Government had failed to take into account adequately or at all Greencore's losses resulting from the major reform of the EU sugar market announced in November 2005, Greencore claims.

Greencore has asserted in submissions to the Government that it was entitled to 90 per cent of the restructuring fund for Ireland and that the costs and obligations it would incur as a direct consequence of ceasing production at Mallow and renouncing its sugar quota would be up to €278 million.

It also claims it would suffer a loss of future income of between €206 and €311 million as a result of the cessation of sugar production here.

Greencore claims it is for the company itself to first present proposals on how the restructuring aid is to be allocated and that the July 12th decision by the Government effectively ordered the company what to do and prejudged the issue prior to Greencore's submission yesterday of its own restructuring plan.

The action has been brought by Greencore Group and Irish Sugar, trading as Greencore Sugar, against the Government of Ireland, the Minister for Agriculture and Food, Ireland and the Attorney General.

The Irish Farmers Association, as representative of the sugar beet growers, and the Machine Contractors Association, have been joined as notice parties to the action.