EU Sugar Sector Reform

Tate & Lyle PLC
                  

Tate & Lyle PLC

EU sugar sector reform

25 November 2005

Tate & Lyle issues an update following the press release by the EU Commission on

24 November 2005 relating to reform of the EU sugar industry. The comments below
are based upon that press release and other information received following the
meeting of the EU ministers of agriculture ('the Agreed Proposals'). The final
legislation will not be issued until January 2006.

Impact of the Agreed Proposals

Tate & Lyle fully understands the need for reform of the EU sugar regime and
welcomes the Agreed Proposals. It is positive for the industry as a whole that a
final agreement has been reached within the agreed timetable, as is the extended
period of stability until the end of September 2015 contained in the Agreed
Proposals.

Whilst the long-term impact on Tate & Lyle remains significant, the final
decision to make the cut in the sugar reference price of 36% (instead of the 39%
previously proposed) and to delay the implementation of the price reduction is
very welcome. Tate & Lyle also welcomes the inclusion of short-term transitional
aid to bring the impact on cane refiners and beet processors more closely in
line, and the short-term reduction of the burden of the restructuring fund on
isoglucose manufacturers.

These changes will reduce the potential impact on Tate & Lyle of the proposals
published by the EU Commission on 22 June 2005. Tate & Lyle's announcement dated
23 June 2005 ('the June announcement') quantified the impact of these proposals.
This impact was expected to be at least offset by the targeted improvement in
operating results from value added products. The Agreed Proposals will have the
effect of eliminating the negative impact on operating results before
exceptional items in the financial years to March 2007 and 2008 and reducing it
thereafter.

Management Initiatives

Tate & Lyle estimates that this impact can be mitigated by projects identified
by management to replace earnings and to increase efficiency. Management
initiatives are expected to improve operating results before exceptional items
by approximately

£10 million in the financial year to March 2007, £23 million in the year to
March 2008 and £24 million in the year to March 2009.

The actions that Tate & Lyle will take to respond to the Agreed Proposals may
involve rationalisation and plant closures which will require prior consultation
with our works council and trade unions, as well as with local government and
regulatory bodies. For that reason, Tate & Lyle today announces the overall
benefit anticipated from mitigation but cannot comment in detail on specific
actions. The impact quantified in this announcement does not include any cost or
benefit from the surrender of quota, which would require approval of works
councils and national governments. If appropriate, further announcements will be
made in due course.

Overall Effect

The overall effect of the Agreed Proposals, arising purely from changes to the
institutional framework and after the expected impact of management initiatives
that Tate & Lyle will undertake, is set out in the table below. The most
significant part of this impact will be incurred in Tate & Lyle Food &
Industrial Ingredients, Europe.

Estimated effect on operating results before exceptional items (£m)
----------------------------------------------------------------------

-------------------------------------------- -------------------------
Year ending 31 March                         2007 2008 2009 2010 2011
-------------------------------------------- -------------------------
Per the June announcement (and including
 2010 and 2011)                               (20) (60) (85) (85) (85)
-------------------------------------------- -------------------------

-------------------------------------------- -------------------------
Changes due to the Agreed Proposals            20   60   65   30   15
-------------------------------------------- -------------------------

-------------------------------------------- -------------------------
Impact of the Agreed Proposals                  0    0  (20) (55) (70)
-------------------------------------------- -------------------------

-------------------------------------------- -------------------------
Management Initiatives                         10   23   24   30   30
-------------------------------------------- -------------------------

-------------------------------------------- -------------------------
Estimated Effect                               10   23    4  (25) (40)
-------------------------------------------- =========================


Note: Excludes inflation and assumes constant exchange rates.

Tate & Lyle's estimates exclude other factors which impact operating results
such as the effect of market forces during the transition period to the new
sugar regime and higher energy prices. Since the June announcement and as
mentioned in our interim results announcement, our European businesses have been
affected by oversupply with a consequent effect on sugar pricing premia. This is
expected to influence margins for sugar and related products in the financial
year to March 2007.

The Agreed Proposals contain certain beneficial changes of a short-term nature
that will cease after March 2009. Despite this, the impact arising purely from
changes to the institutional framework in the period beyond March 2009 will be
less onerous than that envisaged in the June announcement. However, forecasts
five years ahead must be treated with appropriate caution.

Capital expenditure on the projects necessary to achieve the management
initiatives will total approximately £35 million. Of this, 40% is expected to be
incurred in the financial year to March 2007.

The changes to the profitability of individual operating units will give rise to
a review of the carrying value of the assets concerned and is likely to result
in an impairment of assets which cannot be quantified at this time.

Iain Ferguson, Chief Executive, said, 'We welcome the sensitivity shown by the
Commission in addressing some of the specific concerns we have raised in our
lobbying. We also acknowledge the support we have received from the British and
Portuguese Governments in delivering an improvement to the scenario which faced
us in June.

'Tate & Lyle has a world class competitive refining business and is not afraid
of competition. However, as we have always said, the regulatory playing field
needs to be level. We remain concerned about the long-term equity between beet
and cane and the difficulties faced by our isoglucose business in the absence of
transferable quotas.

'Our culture of high efficiency and innovation has enabled us to identify
initiatives to mitigate the adverse impact of the Agreed Proposals.

'In our June announcement, we stated that we expected that the targeted
improvement in operating results from value added products would at least offset
the adverse effects we anticipated from changes to the institutional framework
of the EU sugar regime proposed at that time. Given the reduction in these
effects following the Agreed Proposals, our conviction that we will achieve this
is stronger still. The continued successful execution of our long-term strategy
to grow the value added component of our business enables us to look forward to
the future with confidence.'

         Please note, a conference call for analysts and investors will be held 
         today at 09.00 GMT.

         UK dial-in: [phone]
         UK replay: [phone]
         Replay passcode: 5154231#

         The replay of this conference call will be available for fourteen days 
         until 8 December 2005.
         
         For more information contact Tate & Lyle PLC:

         Mark Robinson (Investor Relations)
         Tel: [phone] or Mobile: [phone]
         Email: [e-mail]

         Ferne Hudson (Press)
         Tel: [phone] or Mobile: [phone]


About Tate & Lyle:

Tate & Lyle is a world leading manufacturer of renewable food and industrial
ingredients.

It uses innovative technology to transform corn, wheat and sugar into
value-added ingredients for customers in the food, beverage, pharmaceutical,
cosmetic, paper, packaging and building industries. The Company is a leader in
cereal sweeteners and starches, sugar refining, value added food and industrial
ingredients, and citric acid. Tate & Lyle is the world number-one in industrial
starches and is the sole manufacturer of SPLENDA(R) Sucralose.

Headquartered in London, Tate & Lyle is listed on the London Stock Exchange
under the symbol TATE.L. In the US its ADRs trade under TATYY. The Company
operates more than 60 production facilities in 28 countries, throughout Europe,
the Americas and South East Asia. It employs 6,700 people in its subsidiaries
with a further 4,500 employed in joint ventures. Sales in the year to 31 March
2005 totalled £3.3 billion. Additional information can be found on
www.tateandlyle.com.

SPLENDA(R) and the SPLENDA(R) logo are trademarks of McNeil Nutritionals, LLC