Tate & Lyle in Sweetener Dispute with Chinese Firms

Britain's Tate & Lyle said on Tuesday it had filed a case in the United States against three Chinese firms alleging infringement of its patents covering the manufacture of zero-calorie sweetener sucralose.

Tate & Lyle said it had filed the case, which is also against 18 importers and distributors, with the United States International Trade Commission (ITC).

The three Chinese manufacturers are Hebei Sukerui Science and Technology Co., Changzhou Niutang Chemical Plant Co. and Guangdong Food Industry Institute.

Tate & Lyle is pinning its hopes on value-added products, led by sucralose, as it shifts away from commodity-type business in response to European Union sugar reforms which have opened the door to cheaper imports.

However, it issued a shock profit warning in January, saying annual sales and profits from sucralose, also known as Splenda, would be only modestly ahead of the previous year. Sucralose accounted for 21 percent of group profit in the year to March 2006.

Tate & Lyle said it filed a similar case with the U.S. Federal District Court in May 2006, which had so far resulted in favourable settlements with three of the 10 defendants cited in that case.

"As a next step after launching our federal case in 2006, we are now ready to proceed with this broader ITC Case and so extend our enforcement action to two more Chinese manufacturing groups, who have stolen our technology, as well as their distribution networks in the U.S," Tate & Lyle General Counsel Robert Gibber said in a statement.

Tate & Lyle shares closed at 596-1/2 pence on Thursday, valuing the business at about 2.9 billion pounds ($5.7 billion).