A major dispute between Nordic Sugar and Danish Sugar Beet Growers has erupted after the sugar producer introduced new samplers in 2024 to analyze the sugar content and purity of the delivered sugar beets. The beet growers believe that the new machines underestimate the quality and thus provide a lower payment for their crops. The conflict has led to a claim from the growers of 117.9 million kroner, which Nordic Sugar has not yet responded to.
The case is now set to be decided as an arbitration case.
According to Henning Otte Hansen, senior advisor at the Department of Food and Resource Economics at the University of Copenhagen, the situation is unusual.
- Both parties are deeply dependent on each other. Nordic Sugar cannot do anything without the beet growers. So it's a high-stakes game, he explains.
However, he assesses that the farmers have the best cards in hand.
- They are used to standing together and working together. Agriculture really has a strength there, says Henning Otte Hansen, adding that in the end, the beet growers can use the land for something else. Nordic Sugar, on the other hand, cannot use their factories for anything else.
Cold air between the parties
Since Danske Sukkerroedyrkere sent their claim of 117.9 million kroner to Nordic Sugar, there has been cold air between the parties. Nordic Sugar has yet to comment on the matter.
According to Henning Otte Hansen, the conflict is a classic example of a conflict of interest, where both parties have a lot at stake.
- The beet growers have a significant economic interest in ensuring a fair settlement, but Nordic Sugar wants stability. It is a negotiation game where both parties will try to pressure the opponent, but they need to find a solution, he says.
According to Danish Sugar Beet Growers, the lack of response from Nordic Sugar is a sign that the company either does not recognize the claim or wishes to prolong the case. The growers believe that Nordic Sugar should take responsibility and engage in a dialogue to find a solution before the conflict escalates further.
On the other hand, Nordic Sugar may have an interest in standing firm on the new measurement methods to avoid future claims. If the company gives in now, it could set a precedent for the growers to make similar claims in the future.
