November 23, 2010 – A UK-owned Polish subsidiary of Twinings Tea has successfully applied for €12 million from EU regional development funds (ERDF) to open a new factory in Poland , transferring 392 jobs from Twinings’ plants in South Shields and Andover to the new facility.
In a written reply[1] to a question from the South East’s Green Euro MP Keith Taylor, the European Commission confirmed that the EU approved a €12 million grant to Twinings’ Polish subsidiary company wholly owned by Associated British Foods (ABF), in a deal signed on October 4. The requirements for ERDF funds to be used for regeneration were sidestepped by ABF, who channeled the application through its Polish subsidiary, and thus escaped the full rigours of the grant process.
Speaking from Strasbourg Keith Taylor said; “These funds are intended for genuine regeneration, not simply relocating jobs from one member state to another. There are good examples of new EU investment which help build communities, but instead this deal risks dismantling them’
“I do not believe taxpayers money should have been used to bolster the profits of an already very successful company like ABF. Last year their pre-tax profits were £559m[2].
‘”The Twinings deal was rushed through, and this optimised the chances of getting the grant – another 3 months would have meant undertakings about genuine regeneration would need to have been given. There is no way the ABF lawyers would not have known that.
“In my view this grant was wrong, and should never have been agreed.
“I believe there is a strong moral case for Twinings to repay this money. They have currently a good reputation in the UK and they should seek to protect it.
“In Parliament I will raise this as a special item in the Regional Development committee on November 30th, and continue to chase the Commission to take action, but so far it seems their rules have been effectively sidestepped. Regeneration is badly needed in many parts of the European community and it is this sort of behaviour that gives ammunition to critics who say the EU is not serving the interests of the people it represents.”
ENDS
Notes to Editors
1. Full reply from European Commission
P-7842/10EN
Answer given by Mr Hahn on behalf of the Commission
(19.11.2010)
Following enquiries with the Polish authorities, the Commission has been informed that a contract for support was signed on 4 October 2010 between the Polish managing authority for the Operational Programme Innovative Economy and R. Twining and Company Sp. z o.o. The total cost of the project amounts to 174,5 million PLN (c EUR 43 million) of which 48,4 million PLN (c EUR 12 million) is support from the European Regional Development Fund.
The Operational Programme Innovative Economy provides that, in the case of assistance to a large enterprise, the Managing Authority undertakes to request an assurance from the enterprise that “the assistance will concern new investments and will not be used for support of investments that concern the relocation of its production or service facilities from another Member State of the European Union”. However, the Polish authorities have not requested such an assurance in this case, as this clause is only relevant when the beneficiary is an entity other than a Small and Medium-sized Enterprise (SME).
Based on information provided to the Commission, it appears that R. Twining and Company Sp. Z o.o was established in 2008. Its shares were bought by ABF Overseas Limited on 1 December 2009. At the time of the grant of assistance, R. Twining and Company Sp. z o.o was still considered an SME, despite the fact that the company met the headcount and financial threshold for being qualified as a large enterprise, because under Article 2 of Annex I of Regulation 800/2008, the company will only become a large enterprise once the headcount and financial thresholds have been exceeded for two consecutive accounting periods, i.e. at the start of 2011.
In a meeting with the Polish minister for regional development on 9 November Commissioner Hahn has asked the minister to look into this matter and to ensure that all applicable rules concerning the granting of assistance have been and will be respected in this case. On the basis of the information to be received from the Polish authorities, the Commission will examine the need for any further investigation.
The Honourable Member will be informed of the results of this enquiry.
2 Source BBC http://news.bbc.co.uk/2/hi/business/6123828.stm
For more information on the work of Keith Taylor MEP, please contact the Green Party of England & Wales Press Team on 0207 561 0282 or Keith’s constituency office: keithtaylor@greenmeps.org.uk
