EU sugar regime

Associated British Foods PLC
25 November 2005


                          Associated British Foods plc

Council of European Ministers of Agriculture reach agreement on the Commission's
                proposals for the reform of the EU sugar regime


For immediate release                                           25 November 2005


Associated British Foods plc ('ABF'), the international food, ingredients and
retail group, today notes the agreement reached in Brussels by the Council of
Ministers for the reform of the EU sugar regime.  This agreement follows
revisions to the proposals published by the European Commission on 22 June 2005.
  The agreement has yet to be ratified by the European Parliament.

The ABF businesses affected by these proposals are the sugar operations of
British Sugar in the UK and Poland.

These proposals are welcomed by British Sugar as one of the most efficient
producers in the EU.  The main elements of the June proposal are retained in
this agreement but are phased in over a longer time and additional funds are
made available for industry restructuring.

The new regime will run from 2006/7 until 2014/15 with no mid-term review.  The
restructuring scheme, funded by a levy on the industry, designed to compensate
marginal producers who relinquish their quota with incentives for early
redemption, has been strengthened with additional funds, and compensation is now
also available for growers and national governments.  It is anticipated that
this scheme will deliver the reduction in EU production sought by the
Commission.  There are no mandatory quota cuts.  In addition British Sugar is
given the option of purchasing 83,000 tonnes of quota for its UK beet sugar
business and approximately 10,000 tonnes for its Polish business.

The proposals include the restructuring levy, payable over 3 years commencing in
2006/7, and reductions in the reference price for sugar of 17% in 2008/9, rising
to 36% from 2009/10 onwards.  The UK beet price will be reduced progressively
from 2006/7 until 2009/10.  The current export producer levy will be removed and
a lower 'production charge' will be introduced from 2007/8.  Exports of
non-quota C sugar will be reduced.

Our best estimate of the operating profit impact on our sugar operations, which
results from this agreement, is based on the assumptions made by the European
Commission for its outcome.  The outcome is slightly better at the end of the
period of transition than the £40m guidance previously given.  Trading in the
current year for British Sugar UK and Poland has been difficult and we expect
volatility to remain during the period of transition.  We continue to work on
cost reductions in both the UK and Poland and the exploitation of new revenue
opportunities including the manufacture of bioethanol in the UK.


For further enquiries please contact:

Associated British Foods
John Bason, Finance Director
Tel: [phone]
Geoff Lancaster
Tel: [phone]

Citigate Dewe Rogerson
Jonathan Clare, Chris Barrie, Sara Batchelor
Tel: [phone]


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