CLF Distribution was last week informed that the European Union’s Director General for Enterprise and Industry would not intervene to amend an EU regulation on the testing of whey protein products used to determine duty levels, the company said.
For CLF Distribution managing director Robin Holliday, the decision will negatively impact his firm's sports nutrition wholesale business. It's, “nothing short of a travesty”, he told NutraIngredients.
The company may have to pay nearly £150,000 (€188,000) back duty, which could mean, “the end of the road for us."
"It is the back tax for products we have been importing for years and our company wouldn’t be able to pay it so there are 170 uk jobs right there on the line," he added.
The European Commission told us it was scientifically scrutinising a, "technically very complex issue" with a study on the matter due for publication by year's end that could identify, "an appropriate and reliable solution."
CLF: It's been proven as flawed
The EU duty regulation on whey protein has been in place since 2008 and has been criticised for the manner in which milk fat is measured.
Speaking with NutraIngredients in April this year Chris Whitehouse, chairman at the Whitehouse Consultancy, which represents the European Specialist Sports Nutrition Alliance (ESSNA), predicted a resolution was just weeks away.
“Member states are close to agreeing a proposal that accepts the test is faulty so those facing huge fines have some recourse; it will also ensure responsible businesses are not penalised until an alternative scientific test for milk fat is proposed and adopted at the EU level,” he said at the time.
But the motion was not carried forward.
“It’s taken four years, but everyone from HMRC [UK Revenue and Customs Department] MEPs and officials in Brussels have accepted that the way in which import duty has been calculated in this instance was completely wrong. There was a straightforward solution on the table, and it is both disappointing and unacceptable that the Director General has turned it down.”
Retrospective and future solutions
Due to the law, CLF has suspended some US whey imports and is contemplating a legal challenge to the regulation.
“HMRC is still trying to collect the money from me. It’s been six years and the affected product is the one our company relies on,” said Holliday.
"We have suspended imports of some of our products because the duty on them would also be calculated incorrectly. Not only is this unfair to us and our customers, it sets a terrible example and says to businesses that even if they’re in the right and are adhering to EU law, they can’t expect the EU to stand up for them,” he added.