The price of sugar bought by European Union drinks producers is to fall, following an agreement to cut EU sugar production subsidies.

The European Commission had to sweeten the loss of grants to large EU sugar-producing countries to secure support for the deal, however. This will probably keep European prices above world market levels.

The UK Industrial Sugar Users Group said: "This deal takes the easy way out by simply dumping increased compensation costs on consumers and industrial users."

The guaranteed price for EU white sugar will be cut by 36% over 4 years - the Commission originally proposed 39% - with farmers compensated by payments independent of production representing 64.2% of the price cut on average.