RGD.L Regulatory News (RGD)

1 Dec 2005 14:30

Real Good Food Company Plc (The)01 December 2005 Date: 1 December 2005On behalf of: Real Good Food Company plcFor immediate release Real Good Food Company plc ("Real Good Food" or the "Company") EU Sugar Reform Welcomed The Board of Real Good Food Company plc, the food manufacturing group inambient, chilled and frozen products, welcomes the decision of the EU Council ofFarm Ministers to reform the sugar regime. The reforms impact directly upon therecently acquired Napier Brown Foods business, the largest independent,non-refining, distributor of sugar in the UK. Commenting on the decision Pieter Totte, Chairman of The Real Good Food Companyplc, said: "We are delighted that the Council have finally resolved the uncertaintysurrounding the future of the EU sugar market. The results of the negotiationsare very much in line with our expectations and plans. Open access, albeit alittle later than expected and reduced prices must be in the long term interestsof all in the sector. We believe that as a flexible non-refiner we will be wellplaced to take advantage of the new supply arrangements and provide ourcustomers with high quality product from a range of sources. "The integration of Napier Brown Foods and Renshaw into the RGFC group has beencompleted and new structures and management teams put in place. Internalannouncements were made on 17 October and executives moved into their new roleswith immediate effect. Following the separation of Renshaw from Napier BrownFoods, on 12 November 2005, we informed our staff at the Runcorn nut plant thatwe would cease manufacturing once existing orders have been completed, expectedto be by the end of December 2005. This was in line with Napier Brown Foodsplc's plans." The company intends to issue a trading update by the end of January in the NewYear. EU Sugar Regime 2006-201530th November 2005 Executive Summary of New Sugar Regime • No fundamental change to Proposal of June 22nd 2005. • Main compromises were in, the level of overall price cut, 36%instead of 39%, the implementation period, 4 years instead of 2 and the level ofcompensation and aid offered to growers and processors. • No compulsory quota cuts. • Limited intervention scheme retained to 2010. • New regime will run from 1st July 2006 until 30th September 2015. • No change to EBA/LDC arrangements. • Internal market reference prices remain unchanged until 1st October2008. • There will be no review of the price and quota levels in 2008. • Year 1 of the new sugar regime will run from 1st July 2006 to 30thSeptember 2007, thereafter the start date of the sugar campaign and themarketing year will be 1st October. Possible Reform Timetable • 2005 - November 24th: EU agreement on Sugar Reform • 2006 - January 17th: EU Parliament vote on sugar reform. • 2006 - Late January/February: Final Council text. • 2006 - Late February/March 2006: Final Council vote. • 2006 - March - June 2006: Implementation/transitional regulationsagreed in Management Committee meetings. • July 1st 2006: Implementation - effective until 30th September 2015 • July 1st 2006: End of current regime, start of EBA duty cuts • 2007 - Anticipated date for Bulgaria and Romania to join • 2008 - Possible start of new WTO agreement • 2008 - Last year of quota restrictions for EBA imports • 2009 - EBA imports all duty free Beet Production & Intervention • Additional Quota of 1.1million tonnes available for one off chargeof €730 per tonne up until 30th September 2007. UK share remains at approx83,000 tonnes. • No compulsory quota cuts - annual quota reductions are possible tomanage market. Carry-over for surplus production will be allowed - followingyears quota adjusted accordingly. A superlevy to be charged on any excess notcarried, exported or used for industrial non food purposes (chemical industry). • A production charge to be introduced from 2007/08, at rate of €12/tsugar quota (50% for isoglucose), to pay for export and production refunds andthe private storage scheme. • Intervention will be retained for the period 2006-10 for maximum600,000 tonnes per annum. Intervention price will be 80% of the reference priceof the following year. Compensation & Aid • Compensation for beet growers is raised from 60% to 64.2%. • Additional funds have been made available for deficit areas(Finland, Ireland, Portugal, Spain and UK). 60% of the deficit area premiumcurrently paid (UK = 60% of €14.60 per tonne). • In member states where farmers give up more than 50% of theirproduction, additional compensation up to 100% is allowed for maximum of 5years. • Preferential imports of raw cane will continue to go to "traditionalrefiners only until 2009/10. Restructuring Fund • To be applied over 4 years 2006/07 to 2009/10 • To be funded by a levy on all sweetener quota production over 3years 2006/07 to 2008/09 • Transitional aid of €150million will go to help full time raw canerefiners subject to a suitable business plan. Reference Price • The intervention price will be replaced by a reference price thatwill be set at a level 36% lower than the current intervention price. • The price decrease will be achieved within four years, beginning inthe 2006/07 campaign. • The reference price will serve as the trigger level for privatestorage. • Internal market reference price will remain unchanged until 1stOctober 2008 • Minimum raw cane price will also remain unchanged until 1st October2008 Proposed Institutional Prices •/tonne 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 EU Reference Price 631.90 631.90 631.90 524.00 404.40 404.40EU Minimum Beet Price 43.63 32.86 29.80 26.70 26.30 26.30Guaranteed ACP/LDC Raw Sugar 523.70 496.80 496.80 434.10 335.00 335.80PriceProducers Restructuring Charge 126.40 173.80 113.30EU Reference Price Net of 631.90 505.50 458.10 410.70 404.40 404.40Restructuring Charge Restructuring Payment to exit 730.00 730.00 625.00 520.00productionAnticipated reduction in 3.48 4.48 5.42 6.28production (million tones) Napier Brown Welcomes EU Sugar Reform • We welcome the agreement reached in Brussels last Thursday whichgives a clear long term perspective for European sugar production. • It was very much in line with our expectations and despite thelengthening of the reform period, the prospects of a more balanced, lower pricedmarket with a wider range of suppliers must be in the long term interests of themajority of stakeholders within the sector. • We believe that as a flexible, non-refiner with many yearsexperience of importing sugars from many parts of the world, we will be wellplaced to benefit from the new regime, post reform. • In the meantime we continue to be highly focused on providing ourcustomers with high quality products and service at competitive prices. Ends Enquiries to: Pieter Totte, Non-Executive ChairmanThe Real Good Food Company Tel: 020 7234 0570 Emma Kane / Duncan McCormickRedleaf Communications Ltd Tel: 020 7955 1410(PR Adviser to the Company) This information is provided by RNS The company news service from the London Stock Exchange