APPENDIX 23
Supplementary memorandum from the Ministry
of Agriculture, Fisheries and Food
INTRODUCTION
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.
EXPORT REFUNDS
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.
BOTTLED WATERS
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.
MAFF/FSA
September 2000
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