Estonia starts knuckling down on excess sugar

  • 2004-12-01
  • From wire reports
TALLINN - Estonian authorities this week undertook a long-awaited attempt to curb preaccession violations of imported sugar, appealing to numerous companies to come up with ways to dispose of the excess sugar supplies by next April.
The Agriculture Ministry and the Tax and Customs Board said they have found that excessive sugar reserves totaled 26,500 tons and belonged to 43 companies.

Total payment on the overstock is nearly 220 million kroons (14 million euros), officials said.

"On the basis of the excessive sugar reserves law, the companies are obliged to inform the Tax and Customs Board what opportunities they choose for the removal of the sugar from the market," the board announced on Nov. 29. "In December the tax administrator will send out memorandums to the companies reminding them of the obligation of providing information and asking which course of action the companies have chosen."

Companies may chose to reprocess the excess sugar into animal feed or fuel, or export it to a non-EU country without applying for subsidies. The sugar has to be removed from the market by next April 30, after which a tax will be levied on the amount still remaining.

The European Union's sugar management committee decided at its meeting on Nov. 25 not to extend Estonina's deadline to remove excess sugar stocks from the market. Iiris Saluri, spokesperson for the Agriculture Ministry, said the sugar management committee had promised to tell Estonia the exact size of its excessive stocks by the end of January, at the latest.

If Estonia fails to get rid of the excessive sugar stocks by the established date, it will have to pay a penalty equal to the highest rate of sugar export subsidy in the given period. The subsidy currently stands at about 9 kroons per kilogram.

According to preliminary figures, extra stocks of cheap sugar accumulated by companies and individuals during the run-up to EU membership amount to 91,000 tons. If the European Commis-sion rules to fine Estonia, the country will have to pay up to 1 billion kroons. The government may claim a part of the penalty from companies, but there is no possibility to do so with individuals.

Estonia must present to the European Commission new data on the removal of sugar from the market by July 31.

Last week the Tax and Customs Board sent out tax notices to the tune of 89 million kroons to 34 companies that possessed excess reserves of food products other than sugar.