Brittany Pork Company to Receive EU Pay-out

FRANCE - The European Commission has proposed to use €918,000 from its Globalisation Fund to support former workers of GAD abattoirs in France. The company went into liquidation, blaming falling pork consumption and high pig feed prices.
calendar icon 24 October 2014
clock icon 4 minute read

The European Commission has proposed to provide France with €918,000 from the European Globalisation Adjustment Fund (EGF) to help 760 former workers of GAD, an enterprise which slaughters pigs and processes pork. The proposal now goes to the European Parliament and the EU's Council of Ministers for approval.

EU Commissioner for Employment, Social Affairs and Inclusion László Andor commented: "The French pork sector, especially in Brittany, has been particularly hard hit by the economic crisis, with feed prices increasing and demand decreasing. Today's decision will help the former GAD workers to find a new job by giving them relevant guidance and counselling".

The French State and GAD are together funding a range of measures to help the dismissed workers back into employment. France applied for support from the EGF to set up a structure to provide advice and guidance to the redundant workers ('cellule de reclassement').

The estimated cost of the 'cellule de reclassement' measure is €1.5 million, of which the EGF would provide €918,000.

In its application, France underlined that annual consumption of pork and pork products decreased in Europe due to the global financial and economic crisis, from 43kg per inhabitant in 2007 to 39kg in 2013. This in turn caused a decline in the production of pork and pork processing by abattoirs such as GAD.

At the same time, the cost of pig feed, much of which is imported from outside the EU, increased. The price of a tonne rose from €150 to €250 between 2006 and 2011, reaching €300 in the second half of 2012 and remaining at an average of €287 in France throughout 2013.

For more than five years, GAD faced price pressure from both farmers struggling to cope with the increased price of feed, and consumers struggling to cope with reduced income, resulting in serious financial difficulties.

GAD's last profitable year was 2008. In 2013, the company closed three of its five production sites, and was placed into receivership, with €65 million accumulated losses between 2010 and June 2013.

The closed sites were located in Lampaul and Saint-Martin (both in Brittany) and Saint-Nazaire (in Loire-Atlantique). The redundancies have a significant adverse impact on the regional economy, in particular in Brittany, where employment is more dependent on the agri-food sector than in the rest of France (11 per cent in Brittany as opposed to five per cent on average in France).

More open trade with the rest of the world leads to overall benefits for growth and employment, but it can also cost some jobs, particularly in vulnerable sectors and affecting lower-skilled workers. This is why Commission President Barroso first proposed setting up a fund to help those adjusting to the consequences of globalisation. Since the start of its operations in 2007, the EGF has received 130 applications. Some €536 million have already been requested to help more than 116,000 workers. In 2013 alone, it provided more than €53.5 million in support.

In June 2009, the EGF rules were revised to strengthen the role of the EGF as an early intervention instrument forming part of Europe's response to the financial and economic crisis. The revised EGF Regulation entered into force on 2 July 2009 and the crisis criterion applied to all applications received from 1 May 2009 to 30 December 2011.

The Fund continues during the 2014-2020 period as an expression of EU solidarity, with further improvements to its functioning. Its scope has been expanded to include again workers made redundant because of the economic crisis, as well as fixed-term workers, the self-employed, and, by way of derogation until the end of 2017, young people not in employment, education or training (NEETs) in regions eligible under the Youth Employment Initiative (YEI), up to a number equal to the redundant workers supported.

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