SA Canegrowers is disappointed that Tongaat Hulett is appealing the high court judgement ordering it to pay levies

SA Canegrowers is disappointed that sugar producer Tongaat Hulett Limited (THL) has chosen to approach the Supreme Court to appeal that it must pay almost R526 million in statutory levies to the sugar industry.

On Thursday, THL’s business rescue practitioners announced that they had been granted the right to appeal a December 2023 decision by the Durban High Court that they had to pay outstanding levies to the sugar industry.

The overdue payment of these obligations threatens the livelihoods of many in the sugar industry. The sugar industry, that includes 24,000 small-scale farmers and 1,200 commercial farmers and a large downstream economy, supports the livelihoods of one million people in South Africa.

The industry is already facing other threats, including dampening demand for local sugar thanks to the Health Promotion Levy (sugar tax) and cheap sugar imports. Further delays in the payment will be to the detriment of thousands of growers and the rural economies of Mpumalanga and KwaZulu-Natal that the sugarcane industry sustains.

Chairman Higgins Mdluli said: “SA Canegrowers had hoped the new owners of THL, the Vision Consortium, would have honoured the outstanding levies and put the matter to rest. Prolonging this matter with legal action puts the livelihoods of the South African sugar industry, including small-scale growers and the one million people that the industry supports, at risk.”

The levies form part of the obligations that are due under the sugar legislation which is legally binding on all members of the industry and that serve to ensure that growers, millers and refiners each receive equitable treatment under the law.

From end October 2022 up until March 2023, THL suspended paying the statutory levies, claiming that it did not have to pay them whilst in business rescue.

THL applied to the courts, after not paying the levies, to ratify that the payment of the levies could be suspended under the Companies Act, but the Durban High Court in 2023 confirmed that the legally binding Sugar Industry Agreement must be honoured and that the Companies Act did not override the sugar legislation.  The case will now be heard in the Supreme Court of Appeal.

SA Canegrowers is an industry association that represents small-scale and commercial sugarcane growers.