Tate, tariffs and Brexit
Posted: October 20th, 2019, 4:57 pm
Toward the tail end of last year, I mentioned that one of my holdings (TATE) was doing quite well, and I asked people why it the face of Brexit uncertainty this was the case. At the time, no suggestions were forthcoming. Now I've noticed that recently (in the past month) Tate's SP has been on a downward trajectory.
So I started googling...
What I didn't realise until this afternoon was that Tate actually likes Brexit:
Keeping Britain’s sweet tooth satisfied is big business. Great dunes of sand-coloured raw cane sugar from the tropics are piled to the rafters at Tate & Lyle’s processing warehouse in east London. The equivalent of eight days’ worth of national sugar consumption occupies a surprisingly large volume of Thames dockside and fills the air with the heady smell of treacle.
....
None of the government visitors can match Brexit secretary David Davis who – in a little-known career footnote – spent 17 years working for Tate & Lyle before becoming a politician, much of it battling against what its current American owners regard as the tyranny of European sugar regulation.
Tate & Lyle was one of the only large employers to campaign openly for Brexit during the referendum and, after Theresa May invokes Article 50 on 29 March, sugar will be on the frontline of the upcoming battle over Britain’s economic future.
The reason lies in the EU protection afforded to Tate & Lyle’s company’s arch-rival British Sugar, which uses a very different technique to make a chemically identical product. Its brand of white crystal, Silver Spoon, is made not from imported sugar cane, but from sugar beet grown on farms in the east of England.
One might think the Brexiteers’ promise of “taking back control” of Britain’s economic destiny would favour domestic producers such as British Sugar over foreign importers, such as Tate & Lyle.
Yet sugar beet production has now become a symbol of protectionist European agricultural policies that many Tory hardliners hope Britain will leave behind....
From https://www.theguardian.com/business/20 ... tish-sugar, but anyway that article is 2.5 years old.
One year later (March 2018)
Iconic British firm reveals SHOCK sums it sends to Brussels and heralds Brexit LIBERATION ICONIC British sugar refiners Tate & Lyle said the European Union forces the company to pay a 35 percent duty on imports before they are allowed to sell their products on the British market.
Tate & Lyle has long complained about the "prohibitively high" import tariffs the European Union imposes on foreign-grown sugar cane – with senior Vice-President Gerald Mason hailing the opportunities Brexit offers the company.
Mr Mason argued that leaving the EU will put an end to the cheques the sugar-refinery business has to pay to Brussels before being allowed to sell its products.
He said: "On some of the ships we buy, we face a tariff of around 35 percent.
"The ship will arrive here at the dock in East London and as we are unloading it, before we are allowed to sell the sugar in the market to consumers, we have to send a cheque of around €3 million to Brussels."
From https://www.express.co.uk/news/uk/93440 ... nion-video
(The irony being from the same rag later in the page Tate & Lyle's London refinery uses imported sugar cane. )
Anyway then I wondered whether it's rumour of a takeover bid that made TATE hit 800p in mid-May. Or whether Trump's Americas (Mexico and Canada) policies may have a part to play? No more likely in the ongoing tit-for-tat(e) between US and China. On Sept 6th 2019. Seems to almost coincide with the recent SP:
Exclusive: China sugar industry to lobby government for extension of hefty tariffs on imports - sources
BEIJING (Reuters) - Chinese sugar mills plan to ask the nation’s Ministry of Commerce to extend hefty tariffs on sugar imports that Beijing imposed in 2017 to protect China’s struggling domestic sector, according to two sources and a draft document viewed by Reuters.
The plan to request an extension of the tariffs was discussed at a meeting organized by the China Sugar Association on Thursday.
Beijing’s trade measures on sugar imports, set to expire on May 21, 2020, “have played an effective role in safeguarding the interest of the domestic industry, and promoting healthy and stable development of the sector,” said the draft document that was dated Sept. 5.
China’s domestic sugar sector has struggled to compete with foreign rivals due to higher production costs. Chinese white sugar prices CSRc1 also plunged in 2018, amid a global supply surplus, pushing many producers into the red.
From https://www.reuters.com/article/us-chin ... SKCN1VR1N4
Any theories (other than noise!) would be of interest,
Matt
So I started googling...
What I didn't realise until this afternoon was that Tate actually likes Brexit:
Keeping Britain’s sweet tooth satisfied is big business. Great dunes of sand-coloured raw cane sugar from the tropics are piled to the rafters at Tate & Lyle’s processing warehouse in east London. The equivalent of eight days’ worth of national sugar consumption occupies a surprisingly large volume of Thames dockside and fills the air with the heady smell of treacle.
....
None of the government visitors can match Brexit secretary David Davis who – in a little-known career footnote – spent 17 years working for Tate & Lyle before becoming a politician, much of it battling against what its current American owners regard as the tyranny of European sugar regulation.
Tate & Lyle was one of the only large employers to campaign openly for Brexit during the referendum and, after Theresa May invokes Article 50 on 29 March, sugar will be on the frontline of the upcoming battle over Britain’s economic future.
The reason lies in the EU protection afforded to Tate & Lyle’s company’s arch-rival British Sugar, which uses a very different technique to make a chemically identical product. Its brand of white crystal, Silver Spoon, is made not from imported sugar cane, but from sugar beet grown on farms in the east of England.
One might think the Brexiteers’ promise of “taking back control” of Britain’s economic destiny would favour domestic producers such as British Sugar over foreign importers, such as Tate & Lyle.
Yet sugar beet production has now become a symbol of protectionist European agricultural policies that many Tory hardliners hope Britain will leave behind....
From https://www.theguardian.com/business/20 ... tish-sugar, but anyway that article is 2.5 years old.
One year later (March 2018)
Iconic British firm reveals SHOCK sums it sends to Brussels and heralds Brexit LIBERATION ICONIC British sugar refiners Tate & Lyle said the European Union forces the company to pay a 35 percent duty on imports before they are allowed to sell their products on the British market.
Tate & Lyle has long complained about the "prohibitively high" import tariffs the European Union imposes on foreign-grown sugar cane – with senior Vice-President Gerald Mason hailing the opportunities Brexit offers the company.
Mr Mason argued that leaving the EU will put an end to the cheques the sugar-refinery business has to pay to Brussels before being allowed to sell its products.
He said: "On some of the ships we buy, we face a tariff of around 35 percent.
"The ship will arrive here at the dock in East London and as we are unloading it, before we are allowed to sell the sugar in the market to consumers, we have to send a cheque of around €3 million to Brussels."
From https://www.express.co.uk/news/uk/93440 ... nion-video
(The irony being from the same rag later in the page Tate & Lyle's London refinery uses imported sugar cane. )
Anyway then I wondered whether it's rumour of a takeover bid that made TATE hit 800p in mid-May. Or whether Trump's Americas (Mexico and Canada) policies may have a part to play? No more likely in the ongoing tit-for-tat(e) between US and China. On Sept 6th 2019. Seems to almost coincide with the recent SP:
Exclusive: China sugar industry to lobby government for extension of hefty tariffs on imports - sources
BEIJING (Reuters) - Chinese sugar mills plan to ask the nation’s Ministry of Commerce to extend hefty tariffs on sugar imports that Beijing imposed in 2017 to protect China’s struggling domestic sector, according to two sources and a draft document viewed by Reuters.
The plan to request an extension of the tariffs was discussed at a meeting organized by the China Sugar Association on Thursday.
Beijing’s trade measures on sugar imports, set to expire on May 21, 2020, “have played an effective role in safeguarding the interest of the domestic industry, and promoting healthy and stable development of the sector,” said the draft document that was dated Sept. 5.
China’s domestic sugar sector has struggled to compete with foreign rivals due to higher production costs. Chinese white sugar prices CSRc1 also plunged in 2018, amid a global supply surplus, pushing many producers into the red.
From https://www.reuters.com/article/us-chin ... SKCN1VR1N4
Any theories (other than noise!) would be of interest,
Matt