A fine of €8.8 million (£6.9 million) against Irish Sugar, the wholly-owned subsidiary of Greencore, for abuse of its dominant position in the market has been reduced by €1 million (£787,000) by the European Court of First Instance.
Greencore, which has already fully provided for the fine in its accounts, last night said it was considering its legal options. Industry sources believe, however, that Greencore is unlikely to take the matter further and will simply pay the fine. An appeal, however, can be lodged by the company to the European Court of Justice on a point of law within two months. In 1997, Irish Sugar was fined by the European Commission for breaching EU competition law in the late 1980s by offering a variety of loyalty discounts to customers. The commission argued that because such discounts were not available to all customers, and were clearly intended to tie customers in to purchasing from the company, they placed competitors at a disadvantage.
In ruling yesterday on Greencore's appeal, the EU's Luxembourg-based lower court backed the commission's argument and said such discounts could not be justified as an economic service, but aimed to restrict the choice of supplier and thus contributed to denying access to the market to a competitor. Even though such discounts were in conformity with Irish law it did not preclude them from infringing EU law, the court said. But it made clear that the ruling applied to Irish Sugar and its Southern subsidiary, Sugar Distributors Ltd, precisely because the companies occupied a dominant position. The court found that both companies dominated the market between 1985 and 1990 and that, for example, during that period Irish Sugar was responsible for 90 per cent of sales in the industrial sugar sector.
It ruled that Irish Sugar's difficult financial position at the time did not mitigate its dominant position. But the court decided to reduce the fine to €7,883,326 because it said that the commission had failed to prove a number of related allegations, notably that Irish Sugar had granted selectively low prices to the customers of a French sugar importer. Irish Sugar was ordered to pay its own and two thirds of the commission's costs.
