MLP report cites 'imaginary' food prices

Once Malta became an EU country, producers of biscuits, pasta, drinks, jellies and soups could start exporting to EU markets without incurring tariffs, which currently range from five to over 24 per cent, Economic Services Minister Josef Bonnici said yesterday.

Prof. Bonnici said the hefty duties now made several Maltese products uncompetitive. A tariff of 24.2 per cent had to be paid on biscuits exported to the EU, 21 per cent on pasta and 14 per cent on drinks.

In return for the complete removal of levies from the EU side, Malta had agreed to reduce levies on certain items in the year leading up to membership, but this was not expected to have a negative impact on industry because it was for a limited number of products, he said.

Manufacturers of such products now had an additional year to prepare to penetrate the EU market and improve their profit margin.

Prof. Bonnici slammed the MLP report which claimed that food prices would increase with EU membership.

The report contained "imaginary" food prices that were much higher than actual EU prices. The methodology used in the report was also wrong.

"The MLP report said that Hovis wholemeal bread costs 45 cents in the EU whereas it actually costs 36 cents. Kelloggs Corn Flakes, according to the MLP, cost Lm2 in the EU when they actually cost Lm1.36. The MLP claims Tetley tea bags cost Lm3, whereas they cost Lm1.23. They also doubled the prices of baked beans and fish fingers, and refused to include prices of vegetables and fresh produce which are cheaper in the EU than they are in Malta," Prof. Bonnici said.

He said the MLP was on the one hand saying that farmers would suffer with EU membership because imported products would be cheaper, and on the other claiming that food prices would increase.

"Using the MLP's own logic, Malta would have the same prices that exist in non-EU countries such as Switzerland, Norway, Iceland and Liechtenstein," Prof. Bonnici said.

Prof. Bonnici questioned how the anonymous person who wrote the report had reached the conclusion that prices of chicken, bacon, ham and eggs would increase with EU membership when their prices were in fact decreasing substantially.

"It is really a case where you have to believe the exact opposite of what the MLP says. Food prices would go down with EU membership, and not increase as the MLP is claiming.

"It is no wonder that the report was anonymous and that no one was willing to be associated with it, because it would cause severe embarrassment to the author," he said.