Finedon Mill directors John Lister and Charles Garavan are being prosecuted in relation to breaches of the 1965 Cereals Marketing Act.

The case comes after Finedon Mill called in administrators on July 12, 2005, after its remaining asset, a mill at Finedon was sold to Rank Hovis on June 28, 2005. The company was once a shareholder in New Rathbones, which went into administration on April 1, 2005.

The directors of Finedon Mill are personally charged with breaching the Act by not registering Finedon Mill with the Home Grown Cereals Authority (HGCA). An HGCA levy is payable by all processors of UK cereals.

A preliminary hearing was held on Tuesday, February 28 at Bristol magistrates court, in the case brought by the Department for Environment, Food and Rural Affairs (DEFRA) on behalf of the HGCA.

The case was adjourned to April 3, and may then be transferred to a Crown Court.

The defence argument is understood to centre on whether DEFRA has the right to prosecute on behalf of the HGCA.

It is believed Finedon Mill Ltd is alleged to owe the HGCA a six-figure sum for around nine years unpaid levies. The company was set up in July 1993 but only started trading around 1996 or 1997. Annual levies would be around £20,000 a year from then.

As a company, Finedon Mill Ltd has already been fined £750 plus £1,500 costs, after pleading guilty to failing to register with the HGCA, at a separate hearing at Bristol magistrates court on February 14.

This sum has been added to the list of unsecured creditors’ debts, held by Finedon Mill’s administrators Baker Tilly. Recovering the unpaid levy is subject to a separate legal process.

HGCA finance director Gordon Bennett told British Baker that this is a landmark case, adding a cereal processor’s failure to register with the HGCA is “a bit like not registering for VAT”.