Farmer's Weekly (South Africa)
Tongaat Hulett faces unpaid levies backlash
The South African sugar industry faces an uncertain future following Tongaat Hulett Limited’s (THL) appeal of a Durban High Court ruling that ordered the company to pay nearly R526 million in overdue levies. The decision to appeal has drawn criticism from stakeholders, notably the South African Canegrowers Association (SA Canegrowers), which represents smallscale and commercial sugarcane growers.
Higgins Mdluli, chairperson of SA Canegrowers, explained that THL had secured a favourable deal at the beginning of 2024 after the company’s creditors approved its business rescue plan. However, the company remained at the centre of contention.
“[THL] failed to pay levies required by the sugar industry legislation between October 2022 and March 2023 and asked the Durban High Court to rule that it was correct in not paying while in business rescue. The High Court ruled against them and confirmed that the Sugar Industry Agreement is legally binding and must be honoured. The amount owed by THL to the sugar industry is now a very significant figure of almost R526 million,” Mdluli stated.
He highlighted that millers and growers had to pay extra towards the levy when THL and another miller, Gledhow, failed to pay, severely impacting the financial viability of both large and small-scale growers.
“THL’s further delay in paying the growers what they are owed threatens the livelihoods of many, not least of which are the rural small-scale growers in KwaZulu-Natal and Mpumalanga. The sugar industry supports the livelihoods of one million people, which includes 24 000 small-scale growers and 1 200 commercial growers,” Mdluli added. “The payment is exacerbated by the fact that canegrowers operate in an environment where the sugar industry is facing many other threats, including dampening demand for local sugar due to the Health Promotion Levy [sugar tax] and cheap sugar imports,” he said.
SA Canegrowers released a press statement expressing its hope that the new owners of THL, Vision Consortium, would honour the outstanding levies and resolve the matter. However, prolonging this issue with further legal action, according to the SA Canegrowers, put the livelihoods of small-scale growers and the one million people the sugar industry supported at risk.
“SA Canegrowers also want the business rescue to succeed as the survival of the Tongaat mills is vital to keep the KwaZulu-Natal sugar industry afloat and save thousands of jobs,” Mdluli said in the statement. –