Sugar giant sour about China plan

LONDON - Tate & Lyle, the world's only commercial maker of sucralose, says Chinese laboratories have begun making the sugar substitute, taking advantage of a lack of patent protection in the market of 1.3 billion people.

Tests in the US on products bought from trading companies in China via intermediaries show some "lab production of sucralose", said Mark Robinson, head of investor relations at Tate & Lyle.

Tate & Lyle is betting on sucralose sales to offset the effects of proposed cuts in European Union sugar subsidies and as demand for the calorie-free sweetener grows amid rising obesity in its biggest markets.

About 200 million Chinese may become obese in the next decade, according to the World Health Organisation. Tate & Lyle is investing £100 million ($256 million) in a sucralose plant in Singapore.

"Strong growth from sucralose is Tate & Lyle's trump card, given the uncertainty caused by changes in the European sugar regime, and there seems a risk they may lose it," said Keith McNaught of State Street Global Advisors.

Tate & Lyle was formed from the 1921 merger of the sugar and syrup companies founded by Henry Tate and Abram Lyle in the 19th century. The company's Silvertown refinery in east London dates from 1878 and is the largest in the world.

The Tate Gallery was founded in 1896 with money and art donated by Henry

Tate.

- BLOOMBERG