Select Committee on Scottish Affairs Appendices to the Minutes of Evidence


Supplementary memorandum from the Ministry of Agriculture, Fisheries and Food


  1.  The Ministry of Agriculture, Fisheries and Food (MAFF) and the Food Standards Agency (FSA) submit this Supplementary Memorandum of Evidence in order to update the original evidence submitted on 9 February 2000.


  2.  As foreshadowed in MAFF`s original memorandum, revised arrangements for the payment of export refunds were introduced in August this year to meet EU commitments in the WTO Uruguay Round to reduce expenditure on subsidised exports.

  3.  The Commission`s three pronged strategy, accepted in principle by the Council of Ministers, was to reduce expenditure by excluding certain products from eligibility altogether, reduce refund rates selectively for those products the Commission considered were least dependent on them and to provide more flexibility access to inward processing relief (IPR). IPR enables manufacturers to import basic commodities tariff-free for incorporation and re-export in processed form. The IPR proposals are still to be finalised.

  4.  Of major significance to the UK as a result of the Commission`s action was a decision to remove eligibility for export refunds for beer and to change the method of calculation of refunds on cereal-based spirit drinks, effectively halving the refund rate. The United Kingdom strongly opposed these particular changes and with the aid of Protocol 19 of the United Kingdom`s Treaty of Accession was able to prevent the Commission removing cereal-based spirit drinks from the list of eligible products altogether.

  5.  Under pressure from the Minister, Nick Brown, in the Council of Ministers, the Commission also gave an undertaking to monitor the impact of the new arrangements. The industry has been asked to provide evidence if the sector is affected disproportionately as a result. MAFF will be closely following developments in consultation with the Scottish Executive.

  6.  Furthermore it is important to consider that currently because of an increasing convergence between world and EU prices for cereals, which results in part from the reform of the Common Agricultural Policy in the cereal sector, maize is the only grain used in the production of cereal-based spirit drinks attracting a refund payment. The requirement for compensating export refunds is therefore diminished while this trend to price convergence continues.


  7.  Amending legislation concerning natural mineral water, spring water and bottled drinking water will be issued soon for public consultation. The proposed amendments will implement changes in EU legislation on water for human consumption (DETR is leading on legislation concerning tap water). In addition, the amendments will permit a claim "suitable for the preparation of infant foods" subject to restrictions on the chemical composition of the water, labelling, advertising and promotion.

  8.  Guidance notes on the legislation are currently being drafted and will cover the legislation after amendment. These will be put out to consultation and issued once the legislation has been implemented.

  9.  The industry`s guide to good hygiene practice for bottled waters has been amended following consultation and industry expects it to be issued in the near future.


September 2000

previous page contents

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 5 April 2001