Europe's sugar factories are closing: the crisis reaches Czechia

Since the start of 2026, several sugar factories across Europe have announced they are halting production: sugar prices have fallen so low they no longer cover costs. Czechia’s largest sugar group, Tereos TTD, has sharply cut investment this year, and its head, Martin Kolář, warns that if prices don’t rise, the wave of closures will continue.

A wave of factory closures across Europe

According to Kolář, 23 factories have already closed across Europe since sugar quotas were abolished in 2017 — a fifth of the continent’s total production capacity. Czechia remains a major sugar exporter, and Tereos TTD accounts for more than half of the country’s domestic output.

After this season wrapped up in early February, a factory in Trenčianske Teplé, Slovakia, owned by the Nordzucker group, shut down production for good. The company cited difficult market conditions and a long-term decline in the profitability of beet-sugar production.

According to the European Commission, the wholesale price of sugar fell from €844 to €510 per tonne over two years (figures as of March 2026). The market is being weighed down by large stockpiles built up after bumper harvests and by falling sugar consumption in Europe, as people shift to healthier diets. Nordzucker will also close its Danish factory in Nakskov in early 2027, stop refining raw sugar at its Finnish plant in Porkkala, and shut down its factory in Cantley, Britain.

Czech factories are feeling the pressure too

After the closure last year of the factory in Hrušovany nad Jevišovkou (part of the Agrana group), Czechia is left with six sugar factories. Financial reports show the problems facing this energy-intensive industry are deepening this year: gas, a key production input, is getting more expensive, and so is sugar beet, due to a weaker harvest. The Vrbátky factory in the Prostějov district posted a loss of 22.6 million crowns last year.

The country’s largest sugar company, Tereos TTD, which owns factories in Dobrovice and Český Meziříčí, saw its turnover shrink over the year — revenue fell from 9.02 billion to 7.97 billion crowns. Net profit dropped from 447 million to 209 million crowns, more than halving. “This year we had planned to invest hundreds of millions of crowns, but the current unstable, critical period is understandably forcing us to slow down on investment,” said the head of TTD. More than 62% of the company belongs to the French group Tereos, more than 35% to Germany’s Nordzucker, and the rest to minority shareholders.

According to Kolář, low prices affect not just the wholesale market but retail chains too: “Today sugar is being sold on promotion at 1995 price levels,” he says. He considers it unfair competition that European producers have to compete with imports from countries where farmers and industry don’t face the same requirements as EU businesses.

Rising gas prices are hitting profits

Not long ago, the company was investing heavily: in the 2023/2024 financial year, Tereos TTD posted a net profit of 1.2 billion crowns, built a new diffusion tower and sugar silo in Dobrovice, and opened a new gas boiler plant in Český Meziříčí. According to Kolář, those investments cut gas consumption by around 10%.

But the company still buys a significant portion of its gas at market prices, which rose from €30 to €70 per MWh over the year. “Right now we’re worried about the prices of electricity, gas and fuel. We’re genuinely talking about hundreds of millions of crowns in extra costs we’ll pay this year,” Kolář said.

Why sugar prices may rise

Besides energy, the agricultural situation is also weighing heavily on the economics of producing sugar and alcohol. This year, sugar beet acreage stands at just over 1.2 million hectares — the lowest in almost forty years. EU planted area already shrank by nearly 10% last year, and this year drought has made things worse: beet yields have fallen by roughly 20%.

Kolář believes this will lead Europe to start drawing down its surplus stockpiles, which could push sugar prices up. “The situation has completely reversed compared with last year — the old stocks from the previous season will start being consumed, and the supply-and-demand economics will kick back in,” he noted. The European Commission expects European sugar production to fall from around 16.6 million to 13.4 million tonnes in the 2026/27 season.

Tereos TTD is doing well with bioethanol: according to Kolář, demand from oil refineries is very high this year, since high gasoline prices make it worthwhile for them to replace as much of it as possible with bioethanol. The company is already running up against the limits of its production capacity: “Right now we’re not able to produce more than we’ve already committed to,” he says.

The picture is the opposite for alcohol sold to the liquor industry: according to Kolář, sales have dropped by roughly 35% over the past four years, and growth in supplies to the cosmetics and pharmaceutical industries hasn’t made up the shortfall. It was this weak demand, he says, that forced Tereos to close its distillery in Kolín in 2024. He sees another risk in the EU’s agreement with Mercosur, which is gradually opening up quotas for ethanol imports from South America — for alcohol production, Kolář calls the deal “essentially devastating.”

Source: seznamzpravy.cz