The EU Commission is seeking “formal guarantees” from the Polish authorities that Twinings is not using an EU funding award to invest in a multi-million euro factory that will see the relocation of UK production facilities abroad.
Twinings is consolidating its UK operations in Andover, Hampshire, with 129 jobs set to go at this site next spring, while the firm’s facility in North Shields faces closure in September 2011 with the loss of 263 jobs. The cuts follow a decision to transfer operations to a new €45m (£37.7m) factory in Poland and expand a Chinese site.
Subsidising UK job cuts
Evidence that Twinings’ Polish subsidiary is receiving EU cash to fund its new facility in Swarzedz – which raises the issue of Twinings workers effectively subsidising their own unemployment as UK/EU taxpayers – first appears in a written reply from the European Commission to a letter sent by former Southeast England MEP Caroline Lucas.
Lucas, who is now Green Party MP for Brighton, wrote to the EU Commission on March 25 asking whether Twinings or its parent company Associated British Foods “are, or will be, in receipt of EU funding for the building of a new factory in Swarzedz.”
The Commission’s response on May 28 states that Twinings’ Polish subsidiary had indeed applied for funding through the European Regional Development Fund (ERDF) under its ‘Innovative Economy’ programme, “The application was made under the heading of ‘support for investments in the production sector’ for an investment in Swardedz.
“The total project value amounts to €45,031,830 [£37.76m]: co-financing from public funds (ERDF and state budget) amounts to €10,400,439 [£8.03m] with the European funds possibly contributing.
“The project was accepted by the [ERDF] managing authority on 30 March 2010, but the contract is not yet signed.”
An EU Commission spokeswoman confirmed to FoodManufacture.co.uk that this means the contract/grant agreement relating to Swardedz was sent to Twining’s Polish subsidiary as a beneficiary, but had not been returned signed as of May 28.
The letter specifies that any ERDF funding award must, “concern new investments and will not be used for support of investments that concern the relocation of production or service facilities from another Member State of the European Union.”
It goes on to say that assurances ERDF funding will not be used inappropriately should be sought by the Polish authorities from all enterprises making applications relating to “relevant operational programmes” between 2007-2013:
“As this assurance was not delivered at the time of submission and appraisal of the application by the Polish subsidiary of R. Twining and Company, the Commission is contacting Polish authorities to seek formal guarantees that EU support will not be used to support the relocation of production or services from the UK to Poland.”
When asked whether an EU grant had been secured to develop the new factory in Poland a Twinings spokeswoman told FoodManufacture.co.uk that the initial decision to relocate had nothing to do with any subsidy.
But pressed on whether Twinings had later received a grant to build the Polish factory she said: “Later I believe yes it [Twinings] did, but of course that’s all been in the public domain.”
Mike Parsonage, regional organiser at USDAW’s (Union of Shop, Distributive and Allied Workers') Andover branch, said:
“We’re aware of the reply to Caroline Lucas’ letter and are awaiting further developments with interest. USDAW is very concerned about the situation, not least because of potential implications regarding breach of EU competition law.
“We may have to examine our legal position as and when more details come out.”
Jayne Shotton, political officer at USDAW’s northeastern division added: “Naturally no-one at Twinings is admitting anything, but it would be terrible if it were true.”