Comment on EU Sugar Reform

Real Good Food Company Plc (The)
01 December 2005



Date:                       1 December 2005
On behalf of:               Real Good Food Company plc
For immediate release



         Real Good Food Company plc ('Real Good Food' or the 'Company')

                            EU Sugar Reform Welcomed


The Board of Real Good Food Company plc, the food manufacturing group in
ambient, chilled and frozen products, welcomes the decision of the EU Council of
Farm Ministers to reform the sugar regime. The reforms impact directly upon the
recently acquired Napier Brown Foods business, the largest independent,
non-refining, distributor of sugar in the UK.


Commenting on the decision Pieter Totte, Chairman of The Real Good Food Company
plc, said:


'We are delighted that the Council have finally resolved the uncertainty
surrounding the future of the EU sugar market.  The results of the negotiations
are very much in line with our expectations and plans.  Open access, albeit a
little later than expected and reduced prices must be in the long term interests
of all in the sector.  We believe that as a flexible non-refiner we will be well
placed to take advantage of the new supply arrangements and provide our
customers with high quality product from a range of sources.


'The integration of Napier Brown Foods and Renshaw into the RGFC group has been
completed and new structures and management teams put in place.  Internal
announcements were made on 17 October and executives moved into their new roles
with immediate effect.  Following the separation of Renshaw from Napier Brown
Foods, on 12 November 2005, we informed our staff at the Runcorn nut plant that
we would cease manufacturing once existing orders have been completed, expected
to be by the end of December 2005. This was in line with Napier Brown Foods
plc's plans.'


The company intends to issue a trading update by the end of January in the New
Year.




EU Sugar Regime 2006-2015
30th November 2005



Executive Summary of New Sugar Regime



•         No fundamental change to Proposal of June 22nd 2005.

•         Main compromises were in, the level of overall price cut, 36%
instead of 39%, the implementation period, 4 years instead of 2 and the level of
compensation and aid offered to growers and processors.

•         No compulsory quota cuts.

•         Limited intervention scheme retained to 2010.

•         New regime will run from 1st July 2006 until 30th September 2015.

•         No change to EBA/LDC arrangements.

•         Internal market reference prices remain unchanged until 1st October
2008.

•         There will be no review of the price and quota levels in 2008.

•         Year 1 of the new sugar regime will run from 1st July 2006 to 30th
September 2007, thereafter the start date of the sugar campaign and the
marketing year will be 1st October.



Possible Reform Timetable



•         2005 - November 24th: EU agreement on Sugar Reform

•         2006 - January 17th: EU Parliament vote on sugar reform.

•         2006 - Late January/February: Final Council text.

•         2006 - Late February/March 2006: Final Council vote.

•         2006 - March - June 2006: Implementation/transitional regulations
agreed in Management Committee meetings.

•         July 1st 2006: Implementation - effective until 30th September 2015

•         July 1st 2006: End of current regime, start of EBA duty cuts

•         2007 - Anticipated date for Bulgaria and Romania to join

•         2008 - Possible start of new WTO agreement

•         2008 - Last year of quota restrictions for EBA imports

•         2009 - EBA imports all duty free



Beet Production & Intervention



•         Additional Quota of 1.1million tonnes available for one off charge
of €730 per tonne up until 30th September 2007. UK share remains at approx
83,000 tonnes.

•         No compulsory quota cuts - annual quota reductions are possible to
manage market. Carry-over for surplus production will be allowed - following
years quota adjusted accordingly. A superlevy to be charged on any excess not
carried, exported or used for industrial non food purposes (chemical industry).

•         A production charge to be introduced from 2007/08, at rate of €12/t
sugar quota (50% for isoglucose), to pay for export and production refunds and
the private storage scheme.

•         Intervention will be retained for the period 2006-10 for maximum
600,000 tonnes per annum. Intervention price will be 80% of the reference price
of the following year.



Compensation & Aid



•         Compensation for beet growers is raised from 60% to 64.2%.

•         Additional funds have been made available for deficit areas
(Finland, Ireland, Portugal, Spain and UK). 60% of the deficit area premium
currently paid (UK = 60% of €14.60 per tonne).

•         In member states where farmers give up more than 50% of their
production, additional compensation up to 100% is allowed for maximum of 5
years.

•         Preferential imports of raw cane will continue to go to 'traditional
refiners only until 2009/10.



Restructuring Fund



•         To be applied over 4 years 2006/07 to 2009/10

•         To be funded by a levy on all sweetener quota production over 3
years 2006/07 to 2008/09

•         Transitional aid of €150million will go to help full time raw cane
refiners subject to a suitable business plan.



Reference Price



•         The intervention price will be replaced by a reference price that
will be set at a level 36% lower than the current intervention price.

•         The price decrease will be achieved within four years, beginning in
the 2006/07 campaign.

•         The reference price will serve as the trigger level for private
storage.

•         Internal market reference price will remain unchanged until 1st
October 2008

•         Minimum raw cane price will also remain unchanged until 1st October
2008



Proposed Institutional Prices


€/tonne                        2005-06   2006-07     2007-08   2008-09     2009-10     2010-11

EU Reference Price             631.90    631.90      631.90    524.00      404.40      404.40
EU Minimum Beet Price          43.63     32.86       29.80     26.70       26.30       26.30
Guaranteed ACP/LDC Raw Sugar   523.70    496.80      496.80    434.10      335.00      335.80
Price
Producers Restructuring Charge           126.40      173.80    113.30
EU Reference Price Net of      631.90    505.50      458.10    410.70      404.40      404.40
Restructuring Charge

Restructuring Payment to exit            730.00      730.00    625.00      520.00
production
Anticipated reduction in                 3.48        4.48      5.42        6.28
production (million tones)



Napier Brown Welcomes EU Sugar Reform



•         We welcome the agreement reached in Brussels last Thursday which
gives a clear long term perspective for European sugar production.

•         It was very much in line with our expectations and despite the
lengthening of the reform period, the prospects of a more balanced, lower priced
market with a wider range of suppliers must be in the long term interests of the
majority of stakeholders within the sector.

•         We believe that as a flexible, non-refiner with many years
experience of importing sugars from many parts of the world, we will be well
placed to benefit from the new regime, post reform.

•         In the meantime we continue to be highly focused on providing our
customers with high quality products and service at competitive prices.




Ends



Enquiries to:


Pieter Totte, Non-Executive Chairman
The Real Good Food Company                                    Tel: [phone]



Emma Kane / Duncan McCormick
Redleaf Communications Ltd                                    Tel: [phone]
(PR Adviser to the Company)




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