Ethnic foods group loses in merger battle

Producers in the North East's fast-growing ethnic foods sector could lose their dedicated business development group following a fall-out with the main funding body.

The Ethnic Food Action Group, which has received £430,000 over four years from the Yorkshire Forward development agency, was told its annual grant would be axed in March because it refused to merge with the much larger Yorkshire and Humber food group.

Ethnic Food Action project manager Stephen Noblett said that producers needed specialised support and that joining forces with another cluster was not in their best interests.

"A lot of money was spent setting up the clusters, but it seems no money is being spent on overseeing the merger so we decided to go it alone. I didn't really see how the two would fit together," said Noblett. He could not understand why funding was being withdrawn from a group operating in the "fastest growing sector in the UK"

Ethnic Action must now decide whether to go private, seek backing from a major manufacturer or apply for a grant elsewhere.

The news dismayed ethnic food businesses in the region.

Vipin Joshi of Sector Foods, said: "For us the impact will be phenomenal as we will lose a major contact and a great encyclopedia."

He added: "We would never have made it to the International Food Exhibition this year without their help and thanks to them we are now exporting to the United Arab Emirates and to Spain."

"The action group is the first port of call for anybody coming into Yorkshire looking for ethnic foods. It seems crazy to discontinue funding. Why get rid of something so successful?"

Yorkshire Forward said the group had no-one to blame but itself for the loss of funds.

Head of enterprise Alex McWhirter said: "Yorkshire Forward funding is used to intervene where the market fails, with a view to financial self-sufficiency after a limited period of time. Yorkshire Forward has been in discussion with the Ethnic Food Action Group and the Regional Food Group for Yorkshire and Humber with a view to closer working between the two groups."