Union, government decry Tereos over cuts to French sugar jobs

PARIS (Reuters) - France's largest sugar and ethanol producer Tereos faced a union and government backlash on Monday after it said it was closing its sugar activities in a factory in northern France, blaming an expected drop in sugar beet output.

Soaring sugar prices helped Tereos, one of the world's largest sugar makers in volume due to large activities in Brazil, to post strong profits in the last year, but high debts prompted the group to sell assets worldwide.

The group said last week it also planned to close a distillery and was seeking to sell a potato starch plant, both in eastern France.

In total the plans would cost 149 jobs, including the closure of its sugar-processing at Escaudoeuvres in northern France.

Since last week, workers have blocked the Escaudoeuvres factory, which has 40,000 tonnes of sugar inside and seeds for the upcoming harvest, union sources said.

At this time of year in France, sugar beet harvesting and sugar processing has finished for the season.

Despite soaring sugar prices, the area sown with beets is expected to fall to a 14-year low in France over the coming weeks as a ban on using neonicotinoid pesticides that are harmful to bees is deterring farmers from planting because they fear crop damage.

Tereos said its cooperative members had committed for 10% less beet.

But Industry Minister Roland Lescure said the decision to halt sugar output at the factory was premature.

"They are shouting 'fire' when they have not seen a single spark," Lescure told Sud Radio before travelling to the site. "A company which earns money and which closes a factory, I think that is not normal."

Agriculture Minister Marc Fesneau last week asked Tereos to clarify the economic rationale behind its decision.

(Reporting by Sybille de La Hamaide and Pascal Rossignol; editing by Barbara Lewis)