The History of British Sugar
This history was produced as a commemorative book published in 1994. It traces the pioneering work of the first growers and factory owners, and relates how Britain's 'home-grown' sugar industry developed.
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The Birth of British Sugar
Home Grown Sugar
In 1909 the National Sugar Beet Association was founded to establish the manufacture of sugar as an industry. At about the same time the Lincolnshire Beet Sugar Company was formed to build a factory at Sleaford. Support for the scheme among the local farming community was strong: 250 farmers agreed to grow a total of 800 hectares (2,000 acres) of beet for five years, and a borehole was sunk to provide the water. But the scheme required a 130,000 pound capital investment, and when this was not subscribed the project was dropped. Cantley
Dutch interests meanwhile, were offering Norfolk farmers contracts to grow beet for shipment to factories in Holland. In 1912, satisfied that the farmers were both willing and able to produce sufficient quantities of the crop, the Dutch built a factory at Cantley in Norfolk. It operated at a loss until 1915 and the following year the company was wound up. The factory was acquired by The English Beet Sugar Corporation and re-opened in 1920.
Despite its faltering beginnings, the Cantley factory marks the birth of the home-grown British sugar industry, and sugar beet is still being processed on that site more than 80 years later.
Sugar making in the early days had the atmosphere of a family business, with fathers and sons working side by side in the factories. The Cooper family's contribution to Cantley's success story spanned 80 years - starting in 1912 when Dick Cooper joined the construction gang which built the factory.
After serving in the First World War Dick returned to the factory and later spent time in Holland learning the art of 'sugar cooking'. He was the first Englishman to learn this skill, which he passed on to his colleagues at Cantley.
Dick was joined at the factory by his brother Fred, and when they retired from Cantley - each after 50 years' service - Fred's three sons Fred junior, Donny and Jack continued at the factory. Fred junior started at Cantley in 1936, left to serve his country, but rejoined the payroll after the Second World War. Dick's daughter Audrey was also a Cantley employee, starting as a fitter's mate and later working part-time in the packaging department.
The Cooper family's long service to Cantley finally came to an end with Jack's retirement in 1992 at the age of 64. The War Years
By 1914, almost 11 million tons of sugar - 45 per cent of world sugar production - was produced from sugar beet, and around 80 per cent of the refined and unrefined sugar being imported to Britain at this time was of beet origin. During the First World War Britain was cut off from supplies of beet sugar from the Continent. Much of the fighting took place in beet-growing areas, with the result that beet sugar production in mainland Europe fell to levels which left no surplus to export for many years.
This new scarcity of sugar pushed sugar prices up, so it is hardly surprising that the British Sugar Beet Society was founded during the First World War to investigate the feasibility of establishing a British beet sugar industry. This organisation's efforts led to the building of a second factory on the Kelham estate near Newark in Nottinghamshire. The project received funding from the Government, now keen to put British industry back on course following the uncertainty of the 1914-18 war years.
The Kelham factory was operated in 1921 by a company registered as Home Grown Sugar Ltd. In 1922 it did not open and its beet crop was processed at Cantley instead. In 1923 the two factories worked in partnership. Colwick
Britain's third beet sugar factory was built in 1924 at Colwick in Nottinghamshire. The project was financed by the newly formed Anglo-Scottish Sugar Beet Corporation led by Lord Wier and Lord Invernairn, with an all-British board of directors and British capital. Reviewing the fledgling home-grown sugar industry in the Monthly Pictorial of July 1926, author Archibald Keynes wrote that this was "the first company to create a modern beet sugar factory under entirely British auspices, with British money and machinery. "This corporation, with commendable public spirit, commenced building Colwick (Nottingham) factory in February 1924 - prior to the passing of the British Sugar Subsidy Act and, therefore, with no guarantee of public assistance such as has since been afforded by Parliament. The record of Lord Wier's group is one of splendid progress, stamped with the triumph of private endeavour in an entirely new field of British industry." According to Keynes, the corporation had placed the beet sugar industry on a "thorough commercial basis".
Things were moving fast at the time Keynes wrote his article. The major sugar- producing countries were now recovering from the effects of war, and world production of sugar was beginning to outstrip consumption. Consequently, world sugar prices had fallen to unprecedented lows and those responsible for Britain's early sugar factories had incurred considerable financial losses. To ease their situation, the Government had remitted the Excise Duty on sugar for a brief period. The Sugar Act 1925
The Sugar Industry (Subsidy) Act of 1925, to Keynes referred, had made invest- ment in new sugar factories far less risky. The Act, with retrospective effect from the 1924 crop, provided new enterprises with direct subsidies from the Exchequer, on a decreasing scale over ten years. Investors were now more willing to come forward and 15 more factories were built in the four years from 1925 to 1928, bringing the total of British beet sugar factories to 18.
The choice of location was very important. Above all, factories had to be close to a large source of water because it was used in processing and to convey the beet. Transport - whether by rail, horse and cart, ba.rge or steam driven lorry - also had to be readily available to bring supplies of raw beet to the factory, and take processed sugar to its customers.
Then, as now, the majority of the factories were located on the eastern side of Britain.
The 18 factories up and running by 1928 were operated in five groups.
Under the Anglo-Dutch banner were the six factories built by Joanness Van Rossum: Cantley (Norfolk); Ely (Cambridgeshire); Ipswich (Suffolk); Colwick and Kelham (Nottinghamshire) and King's Lynn (Norfolk).
The Anglo-Scottish group operated five factories: Spalding (Lincolnshire); Cupar (Fife); Felsted (Essex); Poppleton (York) and Kidderminster (Worcestershire).
The Bury group's four factories were Allscott (Shropshire), Bury St Edmunds (Suffolk), Peterborough (Huntingdonshire) and Selby (Yorkshire).
The Lincolnshire group operated Bardney and Brigg factories, while the Wissington group operated just one in the Norfolk fens.
In addition to these 18 factories, two more were built in 1925 and had failed by 1928. At Greenock in Scotland a small factory built by the Orchard Sugar Company closed after the 1927/8 campaign when the owners went into liquidation. In Oxfordshire, Sugar Beet and Crop Dryers Ltd. set up an experimental factory at Eynsham to investigate whether sugar beet could be dried and preserved for processing outside the normal season. It closed within two years, after establishing that the artificial drying technique was impractical.
The remaining 18 factories operated with total autonomy and guarded their independence so jealously that each ignored the existence of the others, and exchange visits were actively discouraged.
World over-production from the mid 1920s to the early 1930s led to a further fall in world sugar prices during the British industry's ten year subsidy period. Some countries sold their surpluses uneconomically, making it unlikely that Britain's sugar factories would be able to compete successfully with imported sugar unless the value of the raw product rose. The Greene Committee
Alarmed at this prospect, the Government set up the Greene Committee in 1934 to ,enquire into the condition of the sugar industry in the United Kingdom, including both home grown beet sugar and imported sugar and covering production, refining and distribution and, having in mind the changes in the structure of the industry which would follow upon its reorganisation under the Agricultural Marketing Acts, to make recommendations for its future conduct and in particular as to the application of State aid in so far as this may be considered necessary.' By now the original ten year subsidy period had ended so, to give the committee time to report without fear of any suggestion that the issue had been prejudged, Parliament extended the subsidy period by two years to cover the 1934 and 1935 seasons' operations.
When the committee presented its report in March 1935, members commented in glowing terms on the value of the beet crop to British agriculture. It was, therefore, something of a surprise when the committee seemed unable to agree on the advice it should give to the Government on the future of the beet sugar industry.
Two members, including the chairman Mr Wilfred Greene (later a peer and Master of the Rolls) stated they were unable to recommend continued government support for 'an industry which has no reasonable prospects of ever becoming self- supporting...'. They did, however, put forward a comprehensive series of recommendations for the unification and reorganisation of the industry.
Another member of the Greene Committee, Cyril Lloyd, took a different and more far-sighted view. Stressing the value of 'home-grown' sugar in the event of another war, he recommended long-term government support to maintain the industry at about its then size. He also argued that Britain's bargaining position as a buyer of imported sugar would be greatly strengthened if it was itself a sugar producer.
Endorsing his colleagues' plans for reorganisation, he also proposed the
amalgamation of the factories into a single corporation, and the setting up of a Sugar Commission to act as a supervisory body.
In July 1935, barely four months after the Greene Committee reported, the Government issued a White Paper which became the basis for legislation setting up the British Sugar Corporation.
As well as declaring that it was desirable, on agricultural grounds, to continue to subsidise production of up to 560,000 tonnes of white sugar per year for an unspecified period of time, the White Paper also proposed:
The Sugar Industry Act
- the appointment of an independent Sugar Commission
- amalgamation of existing factories into a single corporation
- that assistance paid to the corporation would include an element to cover depreciation of plant and remuneration of the approved capital
- that the assistance payments would be made on a basis which would provide an incentive to the corporation to maintain and increase its efficiency.
The Bill proposing the formation of the British Sugar Corporation was brought before Parliament in February 1936. It eventually passed both Houses as the Sugar Industry (Reorganisation) Act 1936 and received the Royal Assent on May 21. On June 12 the British Sugar Corporation was registered under the Companies Act 1929. The Treasury held 750,000 of the corpora- tion's 1 pound ordinary shares on behalf of the Government in recognition of the public subsidy that went into the creation of the industry.
The independent Sugar Commission established under the 1936 Act was charged with keeping under review the growing of sugar beet and the manufacture, refining, marketing and consumption of sugar,r. It was to have an advisory role, but was to have executive authority on certain technical questions. The Commission would also organise and oversee a comprehensive scheme of research and education. It would ensure that the costs of this work were met by apportioning levies to those branches of the industry reaping the benefits of the scheme.
The Commission was also to act as arbitrator between representatives of the British Sugar Corporation and the growers during any disagreement over the terms and conditions under which the crop should be grown.
The self-financed research and education fund was a revolutionary step. No other body had previously sought to fund agricultural research and development work in this manner. Some 60 years later the work of the Sugar Beet Research and Education Committee remains the UK's sole example of totally self-financed research and development activity for an agricultural commodity.
The beet sugar factories ceased independent operations and the next day they were back in business under the umbrella of the British Sugar Corporation, which was formed with share capital of 5 million pounds in 1 pound ordinary shares. The corporation 'bought' the goodwill and assets of the factories with shares.
The amalgamation of the independent companies into a single entity meant that the entire domestic crop could be managed in a planned and co-ordinated fashion. Anomalies between the individual factories were removed, and this allowed the industry to develop a standard of efficiency that would have been impossible under the old regime.
After the War >>
Record Production >>
Monogerm Seed >>
Silver Spoon >>
The outbreak of the Second World War, however, resulted in complications for the home grown sugar industry which could not have been envisaged at the time the 1936 legislation was drafted.
The newly created Ministry of Food had to take emergency measures to counteract the success of German sea patrols in limiting imports. Often farmers were told which crops to grow, and farms took priority when labour was in short supply. In common with other producers, the corporation saw its products rationed and price controlled. (Sweets continued to be rationed until February 4, 1953.)
During the war, the corporation's efforts concentrated on producing the greatest possible output of sugar to meet wartime needs.
Its contribution to the war effort was impressive. Throughout the war, despite the difficult circumstances experienced by industry in general, the corporation produced the equivalent of an eight ounce ration of sugar per week for every inhabitant of the United Kingdom. It also produced large quantities of animal feed in the form of tops and dried pulp.
This eased the pressure on the nation's shipping resources and, by reducing imports, helped conserve Britain's currency reserves. The area given over to growing sugar beet increased steadily in response to the Churchill government's exhortations to 'grow more' and, by the end of the war, beet was growing on around 160,000 hectares (395,000 acres) - a considerable increase on the area which had grown sugar beet in the early 1930s. The huge increase in the crop led to longer campaigns, so that by 1945 much of the factory equipment had been overworked and needed to be replaced.
The corporation therefore embarked upon a sizeable capital investment programme designed to maintain the industry's reputation for efficiency and take advantage of rapid advances in processing technology.
At the helm, throughout this first phase of the industry's development under one management, was the British Sugar Corporation's first chairman, Lt Col Sir Francis Humphrys. His involvement in the British beet sugar industry followed a distinguished career as a diplomat. In 1935, on returning to England after three years as Britain's first ambassador to Iraq, Sir Francis was appointed chairman of the government tribunal which examined the proposal to amalgamate the sugar factories. When the corporation was registered in June 1936 it was announced that Sir Francis would be its first chairman.
In 1949 Sir Francis retired. Tribute was paid to the role he had played in welding the 18 factories into a single entity.
It had not been an easy task, but it was stated that Sir Francis had achieved it through his "tact, charm, personal energy and beyond all else, his sense of duty."
After the War
After the war there had been a change of government, and the King's speech at the state opening of Parliament in October 1950 declared the new administration's intention to 'transfer to public ownership the shares in the British Sugar Corporation which are not held by the Exchequer'. This ,nationalisation' of the British beet sugar industry did not occur, because lack of parliamentary time meant that the proposed Bill was not introduced. There was, in fact, a strong lobby against nationalisation from Tate & Lyle before a general election and change of government in the following year.
After this, although the government's stake in the business was still only 36 per cent, many people mistakenly believed that British Sugar was a nationalised industry. It was an industry controlled by the government but not wholly owned. The government did not sell its shareholding until 1981- 45 years after it had been acquired.
Work on updating the Cantley, Bury, Ely, Felsted and Allscott plants had started immediately after the war.
Early in 1950 the corporation decided upon a five-year programme of modernisation designed to bring all 18 factories up to date. It was completed ahead of schedule in 1954. The work cost more than 9 million pounds and included the replacement of boilers, evaporators and warehouse equipment, and the installation of continuous diffusers at most sites. At several factories additional buildings were constructed to accommodate the new plant.
The corporation's technical services were also reorganised: new offices were built at Peterborough to house the central drawing office and mechanical accounting staff. These technical headquarters later also accommodated the purchasing and sales staff.
A central machine shop was set up to supplement the factories' own expertise and facilities, so that major engineering work would not have to go outside the industry.
The capital investment made a massive impact on the industry's performance. For example, reconstruction of the Felsted factory, completed in 1952, increased its capacity from 1,800 to 2,400 tons of beet sliced per day.
Each year in his annual report, Sir Alan Saunders, who had succeeded Sir Francis Humphrys as chairman in 1949, was able to report dramatic improvements, not only in capacity, but also in slicing rates, sugar production and sugar quality. Modernisation had also led to greater efficiency in terms of reduced sugar losses, coal consumption and labour usage.
Between 1945 and 1955 the daily average of beet sliced rose from 31,000 tons to 41,000 tons. In the same period, the level of factory labour halved from 137 to 64 man minutes per ton of beet worked, and coal usage fell from 10.4 to just 8 tons per 100 tons of beet worked.
It was a similar story in the beet fields where there were improvements in the crop tonnage and sugar yield per acre. There were various reasons for this. Firstly, during the war Britain had been cut off from supplies of beet seed from the Continent. The British beet seed industry, which had been forced to become self- sufficient, was now flourishing. By 1952 the corporation was buying and supplying to growers 13 reliable varieties of beet seed. Fertilisers & Herbicides
In addition, farmers were now taking advantage of newly available fertilisers and herbicides. After years of research, growers were at last armed with chemical treatments to combat the pests and diseases to which beet is susceptible. Beet seed could now, for example, be dusted with a powder which would protect against wireworm and the crop itself could be sprayed with insecticides that would limit the spread of diseases such as virus yellows.
In turn, the better yields meant that farmers were more inclined to invest in labour-saving drilling and harvesting equipment. By the mid 1950s almost half of the crop was being harvested by machine.
Much of this progress was due to the work of the Sugar Beet Research and Education Committee, working in partnership with farmers, agricultural departments and scientists.
Major changes were also taking place in the way the corporation's factories handled and delivered their sugar. Until the late 1940s all of the corporation's white sugar was stored and transported in 3cwt jute or 1cwt paper sacks.
This is even how it would arrive at the shops, where it would be weighed out into paper bags.
By 1951, however, small packaging departments, mainly staffed by women, were packing granulated sugar into buff coloured 21b 'B. S. C.' brand bags, printed in blue and red lettering. Two years later the corporation introduced its 1lb packet, and the bags began to be made of better quality white paper.
In 1955 Poppleton (York) became the first of the corporation's factories to store sugar in giant concrete silos. These towers, eventually installed at nearly every factory replaced the labour-intensive task of stacking sacks, which then had to be manhandled out of stores and on to lorries.
The switch to silos meant granulated sugar could be transferred straight into insulated bulk tanker lorries for delivery to food manufacturers, and these vehicles became an increasingly common sight on Britain's roads.
The Sugar Act of 1956 put legislation relating to the corporation on a permanent footing. It replaced the 1936 Act and temporary legislation which had come into force as a result of the war. The Act ended state trading in sugar and set up the Sugar Board, whose functions would be to buy commonwealth sugar under the Commonwealth Sugar Agreement, at a subsidised price and sell it commercially, to pay the corporation whatever subsidy was necessary to fund the guaranteed price for growers, and to levy a tax on consumers to fund both these subsidies. A clause of the Act authorised the Treasury to guarantee debentures, issued by the corporation to meet capital expenditure, up to a total of 15 million pounds.
During his eight years as British Sugar Corporation chairman, Sir Alan Saunders placed emphasis on 'good staff relations'. He introduced long service certificates, which he personally signed.
In 1956 his administration introduced a pension scheme for manual workers.
His terms of office also saw improvements in working conditions, great emphasis on accident prevention and the addition of canteens, recreation centres and sports grounds.
A few days before his death in 1957, Sir Alan undertook what turned out to be his last task in office - an address to the Works Advisory Council chairmen and vice chairmen in London. It was clear to those around him that he was not well, but despite efforts to dissuade him, he spoke at length in the morning session and concluded proceedings in his usual cheerful style in the afternoon. The obituary notice read: "There is little doubt that his devotion to duty hastened his untimely end and he died as he would have wished, working to the last."
Sir Alan's successor as chairman was Sir Edmund Bacon, who had joined the Corporation as a director in 1955. Sir Edmund, Premier Baronet of England and Lord Lieutenant of Norfolk from 1949 to 1978, had supervised relief measures following the east coast flood disaster of 1953.
He was an extensive landowner in Lincolnshire and Norfolk, and prior to joining the British Sugar Corporation board was vice-chairman of the Sugar Beet Research and Education Committee of the Ministry of Agriculture.
Sir Edmund had been awarded the OBE in 1945, and in 1965 he was created a Knight Commander of the British Empire, mainly in recognition of the way he fostered the interests of the British beet sugar industry. Sir Edmund's arrival ushered in a new era for the British Sugar Corporation. He was a man with influence in high places, and he had a clear vision of the way in which the company should progress.
Capital expenditure, aimed at boosting the capacity of the factories so that they could cope with the increasing crop yields, continued in earnest at the rate of about 2 million pounds per year.
After virus yellows severely affected the 1957 crop, farmers began to spray their beet as a matter of course. Increasingly effective use of processed seed, precision drilling equipment, weed killers and pest spraying contributed to improvements in crop yield per acre. Record Sugar Production
The factories' new capabilities were put to the test in the 1960/61 campaign, when a record 7.2 million tons of beet was processed, producing almost 900,000 tons of sugar.
By 1963, most of the spring work was being carried out with processed seed and precision drilling equipment, and 85 per cent of the crop was being harvested by machine. In the factories the labour required to work a ton of beet was half what it had been in 1948.
Up-grading of the factories pressed ahead during the 1960s. More French-made continuous diffusers were installed, and the corporation's plate shop at King's Lynn was kept busy making the huge drums for new pulp dryers. Silo storage became commonplace, and the King's Lynn and Bardney factories were equipped to produce liquid sugar for the food and drinks industry.
The corporation expanded its workshops so that factory plant could continue to be fabricated and maintained in-house. Computers began to take over routine data processing tasks. The central laboratory at Peterborough moved into a new building. Increased Automation
Working conditions were improved by the increasing automation of the factories, which had begun in 1957 with the installation of a partly automated extraction plant at Wissington. The beet reception procedure was mechanised and control panels, made to measure at the Wissington workshop, became a common feature of almost every stage of the sugar production process. Mechanisation also crept into the pre-packing operation, which grew rapidly as more and more grocery shops became self-service and consumer demand for conveniently packaged sugar soared. It now accounted for more than half of sales.
In the early 1960S the corporation began pre-packing caster sugar in wrapped cartons, and introduced small paper sachets of sugar for railways, airlines and other large organisations. In 1964 the corporation issued commemorative sachets celebrating the 400th anniversary of the birth of William Shakespeare. Also new were the corporation's 5lb polythene bags of caster sugar.
The corporation widened its range of sugars by introducing icing sugar, marketed in 1cwt paper sacks and 7lb polythene bags, and sugar cubes.
In 1963 the corporation was involved in the foundation of the British Sugar Bureau. This was set up to encourage consumption of refined sugar and thus combat the threat to the British sugar industry of the newly available artificial sweeteners.
By 1970, nine of the corporation's factories had their own packaging departments. Monogerm Seed
An important breakthrough for the beet sugar industry came with the development of monogerm beet seed, which when sown with precision drilling equipment, produces well spaced single healthy plants. Monogerm seed was sown in the UK in commercial quantities for the first time in 1966, and in 1967 it was sown on 14 per cent of the total acreage. The new seed and the use of weed killers meant it was no longer necessary to hand-hoe the crop and chop out surplus seedlings. This, coupled with mechanisation of sowing and harvesting, meant that gangs of farm labourers in the beet field became a less familiar sight.
While monogerm seed and farm machinery were changing the face of beet farming, massive capital investment was to have a similar effect on the beet sugar processing industry during the 1970s.
The transformation of the factories which took place in that decade was ushered in by Sir Edmund Bacon's announcement at a board meeting in 1967, that the Wissington factory was to be reconstructed.
By the time he retired a year later, work was already underway. The 10 million pound project was completed in time for the 1971 campaign and more than doubled the factory's processing capacity. Powered by natural gas rather than coal, the new Wissington factory incorporated some of the most modern electric and mechanical equipment then available, and became the corporation's showpiece.
Sir Edmund is widely regarded as having set the scene for Gerald Thorley, his successor as British Sugar Corporation chairman. Formerly vice chain-man of Allied Breweries and chairman and chief executive of Ind-Coope, Gerald Thorley brought to the corporation a wealth of knowledge and experience of operating at the highest levels of business. He was knighted in the 1973 New Year's Honours List.
The huge capital expenditure programme undertaken during his term of office completely altered the character of the UK beet sugar industry and laid the foundations for today's modern, energy efficient and economic sugar extraction operation.
A factory rationalisation programme led to the closure of Cupar in 1972, but in the four year period after the opening of Wissington, a further 40 million pounds was spent on modernising the remaining factories.
There were a number of reasons for this dramatic increase in capital expenditure. Improved growing techniques meant there was a need for larger factory capacity, and there was a desire for short campaigns.
But above all, British Sugar wanted extra capacity so that it would be in a position to take advantage of the increased national sugar beet acreage expected to result from Britain's imminent entry into the European Community (EC).
In 1972 the corporation's turnover, reflecting a rise in world sugar prices and the record tonnage of sugar sold, reached an all-time high of 96 million pounds. Profits were 7.75 million pounds, boosted by a bumper sugar beet crop which outstripped the previous record yield in 1960/61.
Entry to the EC in 1973 brought a new atmosphere of competition to the British sugar industry. In the past there had been a statutory market sharing agreement where- by the corporation would supply the eastern part of the country, while the cane sugar refiners, most notably Tate & Lyle, would supply the west and south regions.
Under the rules of the EC this arrangement had to cease, so from February 1, 1973, the corporation was competing for market share in all areas, and not just against the other refiners in the UK, but also against other EC producers. Silver Spoon
Silver Spoon' - launched in 1972 as the new brand name for British Sugar's retail granulated, cubed, caster and icing sugar - began to be sold in previously untried areas, supported by press and television advertising, posters and leaflet campaigns.
When, two years after Britain's entry to the EEC, the Labour government led by Harold Wilson held a national referendum to determine whether the people wanted Britain to stay in or pull out, British Sugar's directors were unequivocal.
In a front page article in the May 1975 issue of British Sugar News, they urged a 'Yes' vote, arguing that it would be in Britain's best interests to stay in.
Outside the European Community, they said, Britain would be poorly placed to influence the thinking and action of the EC Council of Ministers. They stated that continued membership would free British Sugar from the legislative controls imposed by successive governments in the past. These had resulted in an artificial financial structure which restricted the growth of the industry.
Finally they stated that continued membership of the EC should mean more growth for the company itself.
Later in 1975 the shareholders were told that, thanks to Britain's continuing membership of the EC, they could reasonably anticipate sustained growth in the corporation's profits.
The Development of British Sugar
The referendum confirming Britain's entry to the Common Market proved to be the spur the corporation needed to emerge from the shadow of Tate & Lyle.
1975 White Paper >>
Silver Spoon >>
EEC Quotas >>
Takeover Bid >>
British Sugar plc >>
Berisford Takeover >>
Award Winning Packs >>
Leaner but Fitter >>
1975 White Paper
In 1975 the Government White Paper 'Food from our own Resources' singled out sugar beet as one of the crops which could help with Britain's massive food imports bill. Worldwide, demand for sugar had been increasing faster than production, with the result that in 1974 world sugar prices had soared to unprecedented levels. The paper pointed out that the EEC was encouraging increased sugar beet production and had raised Britain's beet quota accordingly. It called upon the home-grown beet sugar industry - then supplying a third of the sugar consumed in Britain - to boost production to 1.3 million tonnes of sugar per year in order to meet half the nation's sugar needs.
The corporation set a deadline of 1980 to meet this target, and announced a 100 million pound five-year capital investment programme designed to boost capacity by the equivalent of three factories.
Major expansion and modernisation would take place at York, Bury St Edmunds, Cantley, Wissington and Newark, but all 17 factories would benefit from the programme.
It was anticipated that the slice rate would jump from 65,000 to 80,000 tons so that campaigns could still be completed within 120 days. At the same time, beet farmers were urged to 'grow more'. They responded enthusiastically, and by 1980 the UK beet area had expanded from under 190,000 hectares (470,000 acres) to more than 200,000 hectares (495,000 acres).
In 1975, to help him in the task that lay ahead, Sir Gerald Thorley appointed John Beckett as chief executive. He joined the corporation from Tarmac Ltd., where he had been group executive director since 1971. Beckett's appointment was sought by the government to begin the ,commercialisation' of the corporation, and six years later the government shareholding was sold.
Relinquishing the chief executive's desk was Kenneth Sinclair, who had joined the corporation in 1949 as assistant to Sir Alan Saunders, moving up to become commercial director in 1964 and chief executive in 1971. In 1973 he had been elected president of the European Association of Sugar Manufacturers (CEFS).
Mr Sinclair had, said Sir Gerald: "Navigated British Sugar through a period of unprecedented change; through our entry into the EEC with all that has meant to the company; and through a time when the company's operating context has become increasingly more competitive. In the uncharted waters of the EEC, his knowledge of the European sugar industry and his top level EEC contacts have been of inestimable value."
John Beckett brought a new management style to the corporation. He acquired a reputation for being tough and abrasive and acted the part of 'boss', but former colleagues later recalled him as having a ,warm personality' beneath a hard exterior. Under the Thorley/Beckett leadership, total factory capacity rose by 25 per cent, and, between the late 1970s and early 1980s profits climbed by 10 to 15 per cent year on year.
In 1976 British Sugar launched a subsidiary company, Beet Sugar Development Ltd., to sell its expertise abroad. Iran was one of the first countries to hire a team from the corporation to iron out production difficulties at one of its beet factories.
The factory expansion programme, meanwhile, had got off to a brisk start, with 15 million pounds spent on improvements in 1975/6 and 26 million pounds the following year.
In 1977 York became the first of British Sugar's packaging plants to 'go metric', turning out more than 400 of the new 1kg granulated sugar packs per minute.
In the same year, a major reorganisation of the company management structure took place in order to ease pressure on head office. Some of the control of the industry was shifted to three newly created regions. In 1980 these were reduced to just two - north and south.
Profits reached 20 million pounds in 1977, and the first Rights issue since incorporation in 1936 raised a further 18 million pounds from existing investors towards the cost of the expansion programme. It had the effect of reducing the government's stake in the industry from just over 36 per cent to only 24 per cent as it did not take up its share of the offer.
Also in 1977, British Sugar 'went national' with its Silver Spoon brand, the product becoming available throughout the UK for the first time. Target sales figures were broken within the first four weeks of the national launch.
Silver Spoon Best Selling Brand
By May 1978 Silver Spoon was established as Britain's best selling brand of sugar, and later that year its market-leading position was reinforced by a major nationwide television advertising campaign to launch the new Bri-star symbol.
1979 brought a succession of problems. The 'winter of discontent', with its Arctic weather conditions and strikes in a number of industries, sent operational costs soaring.
At the Cantley Plant, heavy snow stranded workers at the factory for several days. Some workers were rescued by lifeboat and coaster, others stayed at their posts, and despite lack of food and sleep kept shutdown procedures going until replace- ment staff could get through.
EEC Proposes Quota Cuts
Then, in November 1979, with that year's campaign on target to produce more than 1.1 million tonnes of sugar, news leaked out that the EC was proposing to cut British Sugar's quota by 30 per cent part of an average cut of 10 per cent across the Community.
British Sugar responded immediately by launching a vigorous campaign. Within hours of the news breaking, John Beckett and Sir Gerald Thorley met with the then Agriculture Minister, Peter Walker, and Ministry officials, to hammer home British Sugar's case. More than 30,000 pamphlets were produced in support of the company's argument, and these were distributed to Members of Parliament, growers, customers and employees.
The proposals threatened the jobs of 2,500 of British Sugar's 6,000 employees; beet growers would have lost 50,000 hectares (125,000 acres), and eight of the 17 factories would have closed. The National Farmer's Union and the factory trade unions all rallied behind British Sugar's senior management, and in spring 1980 beet growers defiantly drilled a near record 210,000 hectares (520,000 acres).
Eventually the EC's proposals were shelved after British Sugar's warnings of a world sugar shortage were proved correct. The reconstruction programme designed to give British Sugar the capacity to produce half the country's sugar requirements was virtually complete in 1979, a year ahead of schedule. Inflation had pushed the final bill for the work up to 150 million pounds.
One effect of this modernisation work was that the Peterborough factory, at a cost of 12 million pounds, was now producing white sugar instead of raws for the first time in 50 years, in fact, all British Sugar factories were now producing white sugar. The slicing rate had increased by 600 tonnes to 5,500 tonnes per day, and massive new steel silos able to store up to 60,000 tonnes of white sugar had been installed.
Another strategic change resulting from the five-year reconstruction was that sachet production was phased out at Nottingham and Cantley factories, and taken over by the newly equipped Newark plant.
The company's progress between 1975 and 1980 had been startling despite poor and untypical crops in 1975, 1976 and 1977. Turnover had more than trebled to 380 million pounds. Profits had quadrupled to 36 million pounds. Production capacity had grown by a third to 1.25 million tonnes of sugar, and, with Silver Spoon as market leader, annual sales had doubled to 1.1 million tonnes.
Corporation Takeover Bid
1980 saw the start of a power struggle which would eventually determine the future of the company. S & W Berisford launched a hostile takeover bid for the corporation which, though referred to the Monopolies Commission, was eventually allowed to proceed. In 1981 Berisford failed by just 3 per cent of British Sugar shares to trigger the sale of the Government's then 24 per cent stake in the business.
Also in 1980, British Sugar declared its aim to boost annual sugar production in above average years from 1.35 million tons to 1.45 million tons. It was estimated that this expansion would trim 50 million pounds from Britain's food import bill. Production records tumbled for the second successive year during the 1980/81 campaign as the capital investment of the previous five years continued to pay off.
A year later, however, the EC cut Britain's total 'A' and 'B' sugar production quotas from 1.326 million tonnes to 1.144 million tonnes. Since farmers were not growing enough sugar beet to support British Sugar's production capacity and domestic consumption of sugar had fallen, Peter Walker, the Minister of Agriculture, accepted a cut in sugar quota in return for better arrangements on sheep.
This development had very serious consequences; four British Sugar factories - Ely, Felsted, Nottingham and Selby - closed on completion of the 1980/81 campaign.
British Sugar plc
In other respects, however the company continued to make notable advances. For example, British Sugar became one of the first producers to print bar codes on the packaging for the retail market.
Electronic process control technology was driving the plant, and a similar revolution had taken place in British Sugar's central offices. All aspects of administration, distribution and sales support were computerised and a state-of-the-art mainframe computer had become the nerve centre of the business, installed in a purpose-built block at British Sugar's Peterborough headquarters.
In July 1981 the government sold its share- holding to city institutions for 44 million pounds. In May 1982 the word 'corporation' was dropped from British Sugar's title. It is now a 'plc'.
Berisford made another takeover bid in 1982, and this time succeeded. For both Sir Gerald Thorley and John Beckett, who led British Sugar's opposition to the takeover, it was time to leave. Gordon Percival took the helm as managing director. During the 1980s about 350 million was reinvested in the business.
Production capacity was now in line with the EC quotas and crop sizes, so capital expenditure focused on cutting operational costs. Much of the new plant installed at this time saved fuel by recycling waste heat and cutting operational costs. New techniques also made a difference. Close monitoring of the sugar making process led to energy savings of more than 30 per cent during juice runs.
In 1982, a purpose-built packaging complex, costing 18 million pounds, was opened at Bury St Edmunds. Equipped with state- of-the-art sugar packaging technology, it was designed to produce 200 million 1kg packets per year.
The 1982/83 campaign processed more beet than ever before in the history of British Sugar, producing a record 1.42 million tonnes of sugar. This was exceeded in 1993/94 when a new record of 1.473 million tonnes was set.
Between 1983 and 1989, the Ipswich factory was totally refurbished in a 40 million pound modernisation programme which made it one of the most modern sugar factories in the EC.
Award Winning Packs
In 1984 the Bardney syrup plant was converted to allow Silver Spoon treacle and syrup to be marketed in glass jars rather than tins. The new look packaging won a string of awards.
Other food groups began stalking Berisford with a view to takeover. Advances from Hillsdown Holdings, Ferruzzi and Tate & Lyle in 1986 were referred to the Monopolies and Mergers Commission. Hillsdown withdrew its bid, while the M.M.C. ruled against both Tate & Lyle and Ferruzzi in January 1987. Ferruzzi then sold its shares to Associated British Foods which launched a bid but withdrew in the stockmarket crash of October 1987.
In 1987, Peter Jacobs, who had succeeded Gordon Percival as Managing Director the previous year, went on video to explain to the employees how, over the next seven years, the company would grow and diversify; British Sugar was to be the cornerstone of Berisford's newly created Bristar Group which would expand into sugar and non-sugar related activities at home and in the USA. Within months the Bristar Group was investing in biotechnology companies in the UK and Ireland and had acquired two American seed companies.
Snow blizzards halted production at Cantley for three days in 1987. The beet road was blocked by drifts six feet deep and the river Yare froze over. Food supplies were airlifted by helicopter to the factory where almost 70 workers were stranded for 48 hours.
British Sugar profits climbed again in the late 1980s, reaching a record 82.2 million pounds in 1988. That year British Sugar became the first food processing organisation to gain certification for food manufacture to British Standard 5750 Part 2 (1987), the UK national standard for quality management systems equivalent to the international standard IS09002.
Sustained investment in the latest technology so increased efficiency and processing capacity in each factory that the Spalding plant was closed after the 1988 campaign.
In 1989 British Sugar became the first UK food company to invest in eastern Europe. A joint venture with a Polish sugar enterprise resulted in the formation of 'SugarPol', allowing two Polish factories to be managed by British Sugar production and agricultural personnel, to the benefit of both parties.
Peter Jackson became the new 'man at the top' in 1989. He had joined British Sugar as an executive director in charge of personnel in 1987 and had become deputy managing director in 1988. He announced a new rationalisation programme aimed at increasing cost effectiveness, which was to change the shape of British Sugar. In 1987, when Tate & Lyle sold its 14.9 per cent stake in S & W Berisford to American industrialists the Pritzker family, it seemed to remove the speculation and uncertainty that had surrounded British Sugar for years.
However, the future ownership of British Sugar had come into question again by 1990. At this time, Berisford was struggling with heavy losses in its property and financial services divisions.
Tate & Lyle - who in June 1990 teamed up with British Sugar for a 12 million pound three- year advertising campaign to promote sugar as a pure and natural product - entered into merger talks, but withdrew when it became concerned about the extent of Berisford's New York property interests.
A half year loss of 144.5 million pounds forced Berisford to invite offers for all of its assets. The sale of British Sugar - the jewel in the Berisford crown became inevitable if the group was to be salvaged.
The auction for British Sugar began in September 1990, just as British Sugar was announcing record profits of 110.3 million pounds. Tate & Lyle's interest was renewed, but attracted further investigation by the Monopolies and Mergers Commission. This cleared the way for Associated British Foods (ABF) - already a major shareholder in Berisford from its earlier, aborted bid - who clinched the deal with an œ880 million takeover offer. ABF's bid was formally accepted at a special meeting of shareholders on December 28, 1990, and took effect from January 2, 1991.
Progress during the late 1980s and early 1990s owed much to Peter Jackson's vision of a flexible, multi-skilled workforce better able to respond to the seasonal nature of the workload. He saw that if individuals were able to adapt to the different types of work required, in turn by the processing campaigns and the off-season maintenance months, they would contribute more fully to the business all year round.
Accordingly, in the early 1990s, some 2.25 million pounds was invested in the people in the business, in the form of additional skills training. The workforce became generally more highly trained, and, correspondingly, better paid. The continuing quest for cost- effectiveness and the competitive edge meant the Brigg and Peterborough factories had to close in 1991.
Leaner But Fitter
British Sugar was now leaner, but fitter - with just 10 factories processing more sugar than 17 had produced a decade earlier.
It had taken 80 years for the industry to become an efficient and highly profitable sugar making machine.
In that time British Sugar had also become the largest volume supplier of cattle and sheep feed in the UK, using the spent beet from the sugar extraction process to manufacture around 700,000 tonnes of molassed sugar beet feed per year.
The company's capital investment, particularly from the 1970s onwards, also reflected the company's commitment towards its surroundings. Factories were equipped with facilities to help conserve the natural environment. For example, water used in the sugar making process was treated - sometimes to a higher standard than that required by law - before being returned to rivers and watercourses.
The open spaces around British Sugar factories became havens for wildlife, and two factory sites - Allscott and Kidderminster - were designated Sites of Special Scientific Interest.
Nearly 40 million pounds was allocated to 'green' projects at the factories in the early and mid-1990s, to ensure that day to day operations would have minimal impact on the local environment.
In April 1991 British Sugar announced that over the next five years 200 million pounds would be spent on improving its remaining factories. This continued investment, together with the ever strong partnership with the beet growers, would secure the industry's future in the highly competitive European market-place.
In 1992, with profits still climbing, work began on a three year project, costing 50 million pounds, to refurbish Wissington factory to renew its reputation as the showpiece of the British beet sugar processing industry.
This project resulted in a fifty percent increase in the capacity of the Wissington factory making it the largest beet sugar factory in Europe, and probably in the world. This increase in capacity meant that production at the neighbouring King's Lynn was no longer required and it ceased operations at the end of the 1993/94 operating season.
The Wissington factory would now manufacture a quarter of all British Sugar's sugar production and would be the largest animal feed plant in Britain.
The massive investment over the years in both equipment and people meant that British Sugar was now well placed to face the business challenges of the coming years.
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