Tate left sour as US allows China to rip off Splenda

The future of Tate & Lyle's wonder sugar, the zero-calorie Splenda sweetener, soured today after an international tribunal ruled the British industrial giant cannot stop cheap Chinese copycats.

The setback for Tate, riven by profits warnings over the last two years, saw the shares fall further, off 9p to 280p and will once more pile the pressure on beleaguered chief executive Iain Ferguson.

Splenda, used to sweeten fizzy drinks such as Coca-Cola and Pepsi, is meant to secure Tate's future, made from the company's creation of sucralose and responsible for around a fifth of the group's profits.

But Tate's protection of its wonder sugar has been under attack by alleged patent pirates, Chinese manufacturers using the technology to create their own artificial sweeteners.

Attempts to stop the Chinese copycats has, however, spectacularly backfired.

Last year, an attempt to stop production at four Chinese manufacturers and halt sales through 18 distributors, in a case put before the International Trade Commission in Washington DC failed.

Tate had accused the Chinese of stealing Tate's technology in the manufacture of sucralose and infringing Tate's "multi-layered patent portfolio" aimed at protecting its interests.

It was further warned the Chinese copycats were attempting to flood the US market with low-quality sucralose.

That case was thrown out and Tate, which has already spent well in excess of £10 million in legal costs, was told by the ITC today that its appeal also failed.

Today's ruling fully upheld the ITC's previous decision and further ruled the latest judgment is a "binding and final determination".

Analysts have warned that failure in the case could see Tate's patent under more widespread attack.

It is also argued that Tate's profit margins from Splenda which have been running at as much as 45% will be slashed.