A decision by the European Court of Justice (ECJ) in February 2017, which ruled that from 1999-2000 production levies for sugar producers were overcharged, has compelled the European Council to refund the excess tax money.

These reimbursements will cost the EU €195.3m, when taking into account €93.1m for the initial levies and €102.2m for estimated interest.

President of the European Council Rumen Porodzanov said: “I am pleased to announce that the decision enables us to put right the wrongs of the past and ensure that those sugar producers who were over-charged are fully refunded.”

The ECJ ruling

According to the Council, the instructions of the ECJ will be implemented on the day after its publication in the Official Journal of the European Union.

For the 1999/2000 marketing year, the regulation will apply from 13 October 2000, and 12 October 2001 for the 2000/2001 year.

“The revision of the production levies for the 1999/2000 and 2000/2001 marketing years will affect the amount payable by the sugar producers to the beet growers,”​the ECJ ruled.

“This is in respect of the difference between the maximum amount of the A or B levy (i.e. 2 % or 37.5 % of the intervention price for white sugar, respectively) and the amount of these levies charged for the marketing years concerned.”​

The sugar sector CMO was established in 1968 in order to ensure a reasonable income for EU sugar producers and self-supply of the EU market, and is subject to periodic reassessment.

Originally, the sugar sector was supported with production quotas restricting sugar beet production to 13.5 million tonnes, and other price support measures. These practices, which guaranteed minimum prices for farmers, were scrapped on 30 September 2017.

Other varieties of sugar that were subject to price caps were isoglucose–or high fructose corn syrup–capped to 0.72m tonnes; and inulin syrup which had a zero quota, effectively banning its production.

Under this regime, sugar producers exceeding their quota had to play a surplus tax on the extra quantity, which was added to the EU budget.

Previously, European nations were forced to import sugar to meet the region’s demands. Now, they are free to export sugar on a global scale.

“Producers will now be able to adjust their production to real commercial opportunities, notably in exploring new export markets,”​ ​the European Commission said.

“It also means fewer administrative burdens for operators, growers and traders.”