FOI reactions to levy dismantling programmes on agro-food sectors

In a recent letter to the Minister for Economic Services, the Malta Federation of Industry, on behalf of its members operating within the agro-food, beverages and tobacco sectors directly affected by the recently published levy dismantling programmes, stressed its disagreement with the programmes for a number of reasons.

Here is a summary of the points the Federation disagrees with. FOI members desiring a copy of the letter sent to the minister are invited to contact the FOI Secretariat on tel: 2123-4428 or 2122-2074.

1. The Federation believes that tactically Government is clearly conceding an important part of the support structure for industry without an immediate gain. Manufacturers do not even have the comfort either of technical and financial assistance in most cases while the European Union has not as yet granted tariff-free market access to the same products listed in the schedule.

To aggravate matters EU manufacturers currently exporting to Malta obtain export subsidies and so can afford to lower their product prices in the Maltese market and therefore compete unfairly by subjecting Maltese industry to severe pressures.

2. Both Legal Notices LN226 of 2002 and LN247 of 2002 do not conform with the FOI written recommendations submitted during the meeting held with the Minister for Economic Services on Tuesday June 25.

That FOI document outlined the positions of firms operating within the pigmeat, eggs and poultry meat, milk, pasta, bakery, confectionery, tomato, edible oils and margarines, animal feed mills, floor mills, tobacco, beverages (including soft drinks, fruit juices, squashes and nectars), beer brewing, and wine producing sectors.

Each sectoral position puts forward a number of proposals for Government's consideration in tackling the problems anticipated (and those already being confronted) as a result of any dismantling of levies. The Federation stands by that position.

3. The recent Legal Notices issued relating to the levy dismantling programmes on the agro-food sectors do not take into consideration the structural problems caused by Malta's insularity and double freight costs on exports. Government has not managed to bring down port handling and transport costs.

4. Until a few months ago the Federation was given to understand that the removal of levies with regard to certain products falling within the agro industry would take place after accession to the EU.

The time frame now being proposed by Government for the removal of levies is inadequate and unrealistic with the time-frames required to allow enough time for enterprises to receive the promised assistance and to implement their restructuring plans.

There is also hardly any time allowed to permit gradual market entry into EU countries, and for any brand introduction exercise in the EU single market.

The FOI stressed that the situation was further aggravated by the economies of scale and massive branding strengths of EU competition entering the Maltese market.