FSA questioned over euro windfall

28 January, 2009

Meat processors are questioning the Food Standards Agency (FSA) over the extra money it is making from meat inspection fees because of the continuing strength of the euro.

The continued strengthening of the euro against sterling has given the Meat Hygiene Service (MHS) a 'handsome financial windfall' says the Scottish Association of Meat Wholesalers (SAMW).

The combination of euro/sterling rate changes and the fact that fees are set at an EU level, rather than nationally, has "advantaged the MHS to the detriment of meat businesses" in no fewer than five of the last seven years, the SAMW argued.

SAMW president Allan Jess has written to Dr Ian Reynolds, deputy chairman of the FSA and chairman of MHS, to seek clarification that this "injustice" will be addressed without delay. The letter also covers the fact that Dr Reynolds told delegates at last year's SAMW conference that MHS had no intention to "profiteer" from meat plants as a result of savings due to euro/sterling rate changes.

"I would welcome your further views on this in the light of the massive change in the exchange rate since then," wrote Jess in his letter to Dr Reynolds.

He also wrote: "If the MHS has no intention to profiteer at the expense of the red meat industry, this injustice must be addressed without delay. Failure to do so will render the assurance, given to our members last April, worthless."

The sterling equivalent of the EU inspection charge is calculated on 31 October each year. The exchange rate on that day sets the charge which meat plants will pay throughout the next calendar year.

According to the SAMW, however, a review of euro/sterling rates on 31 October each year since 2001 shows that, in five of these seven years, the MHS has gained, while meat businesses have lost out. In October 2007, for example, the euro was worth 69p, making the minimum five euro charge, for 2008, £3.45. By the end of September 2008 the euro was worth 79p, making the five euro change equivalent to £3.95, an increase to UK plant operators of 50p per head of cattle.

"Events since then, of course, have made this anomaly much worse," said Jess. "In effect, MHS has received a handsome financial windfall at our members' expense. We await Dr Reynolds' response with interest."

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