Ireland will probably see its sugar industry wiped out, or certainly drastically reduced, due to a sweeping policy reform proposed by the European Commission, an internal document showed today.
The three other EU countries Greece, Italy and Portugal would also experience the same fate, the document said.
It classifies the EU's 25 member states into three groups, depending on their production costs and the EU's proposed new sugar price: 39 per cent lower over two years.
"If member states (in this group)...fully abandoned production, this would represent a 9 per cent drop compared to EU-25 quota sugar production in 2003/04," said the Commission document, a copy of which was obtained by Reuters news agency.
"However, it is not excluded that some factories would remain in business," it said. The study showed that these four countries had "break-even points", below which sugar beet became less profitable than other crops such as cereals and oilseeds, that were far higher than the minimum beet price proposed under the reform.
The country that was most vulnerable to the price cuts, as the EU's internal sugar price fell below €550 euros a tonne, was Italy - the south of the country first, and then the north.
The EU's white sugar intervention price, where Brussels will buy up sugar from producers, now stands at €632 a tonne, or three times the world market.
After Italy, other less efficient producer countries would soon feel the pinch, the study said.
"A price below €500 per tonne would make sugar production less profitable in Ireland, Portugal, Central Italy, Greece and parts of southern Spain. Therefore, in these regions, production is likely to decline," it said.
The study named a second country group where "production is likely to be maintained but at a significantly lower level".
It includes Denmark, Finland, Hungary, Spain and the Czech Republic, collectively representing 17 percent of EU output.