Seafood firms told ‘little chance of state aid’

YOUNG’S and other major UK seafood producers have been told there is a little chance of the European Union changing its state aid rules to such companies.
Although Young’s doesn’t catch or farm fish, the EU classes them as fishing companies, not as conventional food manufacturers.
Therefore, they are not entitled to the type of state funding that might go to other food manufacturers, although they can tap into grant aid from the European Fisheries Fund, soon to be re-branded as the European Maritime and Fisheries Fund.
This anomaly has just been taken up in the House of Commons by Grimsby’s Labour MP Austin Mitchell, and backed by Martin Vickers, Conservative MP for neighbouring Cleethorpes.
Mr Mitchell, an avowed Euro-sceptic and who once changed his name by deed poll to Austin Haddock to highlight the plight of the Grimsby fishing industry, told fellow MPs:
‘Young’s is a seafood manufacturer on a considerable scale; I think it is the biggest seafood manufacturer in the country.
‘However, this anomaly also applies to other seafood manufacturers, and seafood manufacturing is a major section of the food manufacturing industry.
‘None of these companies can get regional selective assistance, or other public support, for the investment they need to expand and grow.
‘What is at issue here is the EU guidance on state aid regarding the entire fisheries sector. That sector is defined as being concerned with “the exploitation of aquatic resources and aquaculture together, with the means of production, processing and marketing of the resultant products.”’
He continued: ‘That definition is being interpreted as applying to Young’s, which employs 3,000 people in Grimsby and Scotland – creating a superb product range.
‘It seems to me, and to Young’s, that to extend these European guidelines to the company is a distortion of their purpose, because Young’s itself catches no fish.
‘It farms no fish; it does not have a fishing fleet; and it does no primary processing of fish, which is the filleting and gutting of fish – the only processing, I think, that the guidelines are meant to cover.
‘Young’s imports its fish from all over the world. In fact, it uses 30 species of fish from five continents. Very little of that fish is caught under the CFP, of which these guidelines are part.
‘Young’s makes from those fish more than 300 dishes. It makes dishes; it turns fish into meals by processing it, adding ingredients and selling it as a meal.
‘So, in every sense Young’s is not a fishing company but a food processing company – a fish and seafood processing company – and therefore it deserves to be excluded from these guidelines.’
Martin Vickers said: ‘This is yet another example of a case where the seafood and fishing industries have been at a disadvantage as a result of European intervention, and that they have missed out on many of the grants and benefits that other industries have had?
‘To take up the point he was just making, does he agree that this issue should be a vital part of any renegotiation?’
George Eustice, the UK Fisheries Minister, congratulated the two MPs for raising the issue in the Commons and said he also shared their Eurosceptic stance.
But he doubted if Young’s or other seafood companies could ever be classed as food manufacturers under the current rules.
However, he did pledge to talk to the European Commission to try to persuade it to change its exemption rules.
The Minister said he sympathised with Grimsby’s plight, adding: ‘There are two issues under consideration: first, what constitutes a seafood business; and, secondly, whether such a business should be eligible for financial support from public funds.
‘On the first question, which relates to the state aid rules, there are two relevant regulations.
‘The first is the fisheries block exemption regulation, EC regulation 736/2008, which concerns aid to small and medium-sized enterprises active in the production, processing and marketing of fisheries products. The second is the fisheries de minimis regulation, EC regulation 717/2014.’
He concluded: ‘Both are clear, in alignment with the financial measures under the common fisheries policy, that they apply to the entire fisheries sector.
‘The rules cover not only fishing or fish farming, or even the primary stages of processing, as the honorouble Gentleman suggested, but all stages of production, including the processing and marketing of the finished product.
‘The regulations effectively mean that support can only be offered in accordance with the conditions set out in the European fisheries fund, which is soon to become the European maritime and fisheries fund.’