SA Canegrowers welcomes court order upholding sugar industry regulatory framework

29 November 2023

SA Canegrowers welcomes the order issued today in the High Court of South Africa, Durban Local Division dismissing with costs the application by Tongaat Hulett and the Business Rescue Practitioners to challenge the financial obligations on the miller in terms of the Sugar Act and the Sugar Industry Agreement.

This order follows the failure of Tongaat Hulett and Gledhow mills to pay more than R1,5 billion due to the South African Sugar Association (SASA) at the end of March 2023. As a consequence of these defaults, the final RV price for growers in the 2022/2023 season dropped by more than R400 per ton, with significant financial implications for growers and compromising the sustainability of their operations.

The business rescue practitioners at Tongaat Hulett subsequently challenged the legal basis for the amounts owed, arguing that the business rescue process took precedence over the industry arrangements. Had Tongaat Hulett succeeded in this argument, it would have released Tongaat Hulett and Gledhow from the legal obligation to honour their financial commitments and fundamentally undermined the structure of the sugar industry.

SA Canegrowers will study the judgment, which will be handed down on Monday, 4 December 2023. We look forward to future engagements with the business rescue practitioners to resolve this matter and secure the critical outstanding funding due to SASA, growers and the other millers in order to help ensure the industry’s long-term survival and protect the livelihoods it supports.

Issued by Kabelo Kgobisa on behalf of SA Canegrowers, 29 November 2023