U.K. High Court maintains Brexit sugar deal, quashing challenge

A challenge to one of the U.K. government’s first post-Brexit trade deals has been quashed in the country’s High Court, where a judge ruled that allowing duty free quotas on sugar were not specifically designed for the benefit of one company, cane refinery Tate & Lyle.

The measure, known as the autonomous tariff quota (ATQ), has enabled buyers in the U.K. to import as much as 260,000 tons of raw sugar per year without duty since January 2021, and was extended last December until the end of 2024.

British Sugar, a subsidiary of Associated British Foods, which processes virtually all of the country’s sugar beet production and doesn’t import, argued in the case that the measures were effectively a state subsidy for its only national rival; Tate & Lyle which refines imported raw cane sugar in London’s Silvertown.

The company’s lawyers argued that this breached terms baked into the Northern Ireland protocol and subsidy controls agreed in the U.K.’s Brexit trade deal with the European Union.

The challenge may have threatened the viability of ASR Group-owned Tate & Lyle, which had been operating at a loss before the tariffs, the court heard. The U.K. government meanwhile, had argued that the Treasury has the right to fix customs duties and to implement quotas for duty free imports.

“The tariff-free status of the ATQ did not involve treating T&L “more favorably” than British Sugar,” Judge David Foxton said in a Feb. 24 judgment. “Not only was it open to British Sugar to import raw cane sugar under the ATQ if it wished to do so, but no duty applied to imports of the equivalent raw material required by British Sugar,” Foxton said in the judgment.