Sugar stoush sours

‘ Mar­ket­ing’ costs at crux of legal ar­gu­ment

Townsville Bulletin - - Investor - by Martin Rasini martin. rasini@ townsville­bul­letin. com. au

BATTLE lines are be­ing drawn as the re­sult of $ 105 mil­lion in losses in­curred due to ex­porter Queens­land Sugar be­ing un­able to ful­fil sales con­tracts due to 2010’ s ex­traor­di­nar­ily wet har­vest­ing sea­son.

Cane farm­ers are threat­en­ing legal ac­tion over calls by Su­cro­gen for them to put for­ward a $ 40 mil­lion con­tri­bu­tion, fol­low­ing an agree­ment with QSL for Su­cro­gen to bear $ 60.9 mil­lion of the losses.

Su­cro­gen claims the losses are mar­ket­ing costs, to which grow­ers con­trib­ute, but farm­ers say the losses are from trad­ing ac­tiv­i­ties, for which they bear no re­spon­si­bil­ity.

About 20 rep­re­sen­ta­tives of cane dis­tricts from Bund­aberg to Moss­man met in Townsville last Wed­nes­day with a view to en­sur­ing grow­ers re­ceived pay­ment for cane sup­plied to Su­cro­gen mills.

‘‘ Rep­re­sen­ta­tives left the meet­ing with a joint in­tent to con­test any fail­ure to pay on the part of the miller and to garner sup­port from in­di­vid­ual grow­ers for legal ac­tion,’’ one grower said.

The Townsville meet­ing came ahead of Su­cro­gen in­form­ing grow­ers by letter on Fri­day that QSL in­tended to deduct ‘‘ the ex­tra­or­di­nary mar­ket­ing costs’’ from pro­ceeds of the 2010 sea­son crop other­wise payable to it, and that, as there had been no agree­ment on shar­ing losses, there would be no pay­ments to grow­ers this week.

QSL ex­ports on be­half of seven milling com­pa­nies and its chief oper- at­ing of­fi­cer John Bird said yes­ter­day agree­ments were ex­pected by to­mor­row with some millers to en­able pay­ments to oc­cur.

Su­cro­gen yes­ter­day met with in­dus­try body Cane­grow­ers to dis­cuss the grower con­tri­bu­tion – about $ 5 per tonne of cane.

There is dis­agree ment a mong millers as to whether it should be al­lo­cated only to for­ward-priced ton­nage or be spread equally across all ton­nage, a po­si­tion held by Su­cro­gen.

Mark Day, ex­ec­u­tive gen­eral man­ager for cane prod­ucts, said Su­cro­gen was com­mit­ted to an eq­ui­table out­come.

‘‘ Su­cro­gen hopes . . . to re­solve the cost al­lo­ca­tion is­sue and de­velop an op­tional de­ferred pay­ment scheme so that a cane pay can be made soon,’’ he said.

‘‘ Also, we are in dis­cus­sions to iden­tify how sugar mar­ket­ing can be im­proved to en­sure it is able to bet­ter cope with ad­verse crop fluc­tu­a­tions.’’

Townsville lawyer Evan Sari­nas said in event of a court stoush, much would hang on the in­tent of the par­ties in use of the term ‘‘ mar­ket­ing costs’’.

Mr Sari­nas said for a class ac­tion to pro­ceed ‘‘ there needed to be seven or more peo­ple with claims that arise out of sim­i­lar or re­lated cir­cum­stance and that give rise to a sub­stan­tial is­sue of fact or law’’.

‘‘ If this con­di­tion is sat­is­fied, they can ap­point a rep­re­sen­ta­tive ap­pli­cant to take on the case on for all and peo­ple can opt out by ad­vis­ing the court,’’ he said.

Mr Sari­nas said by com­par­i­son a test case, when won, al­lowed oth­ers to seek rec­om­pense on the ba­sis that the judg­ment set a prece­dent. FEES CON­TESTED: A bad sea­son and nat­u­ral dis­as­ters like Cy­clone Yasi have left cane farm­ers reel­ing and look­ing for an­swers

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