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Friday, 15 December, 2000, 18:06 GMT
Red tape 'helping China overtake EU'
Silver Spoon sugar packets
Silver Spoon: part of the Associated British Foods portfoilo
The boss of one of Europe's top food firms has called on policy makers to ease the burden of red tape on businesses, or risk seeing China overtake the EU in the world economic league.

It seems to me that there is once again an increasing trend for more regulation

Harry Bailey, chairman, ABF

Harry Bailey, chairman of the firm which owns Ryvita, Silver Spoon sugar and Twinings tea, is warning against the growth in regulation and protectionism, and urged a broader awareness of the role of free trade in boosting living standards.

Firms in Europe face increasing red tape in the environmental, occupational health, employment and corporate governance areas, Mr Bailey told shareholders of Associated British Foods.

He also noted a decision by the European Parliament on Wednesday to pass changes, bitterly opposed by UK businesses, which could spell the end of hostile takeovers in the EU.

'Government interference'

"If we are to go on enjoying the benefits of expanded choice, better quality, and lower prices... we need to be aware that those benefits were driven by liberalisation of trading, an acceptance of technological change, and a scaling back of government interference," he said.

It would be ironic if economic performance in an increasingly regulated Europe was outstripped by a China determined to sweep away... centralised bureaucracy

Harry Bailey

"It seems to me that there is once again an increasing trend for more regulation, ever more bureaucracy and more protectionism."

One country where Associated British Foods is reaping "encouraging returns" is China, where markets are being liberalised, he said.

"Economic performance in that country over the past decade has been outstanding and the standard of living of the population has benefited accordingly.

"It would be ironic if economic performance in an increasingly regulated Europe was outstripped by a China determined to sweep away the effects of decades of centralised bureaucracy."

Spending power

In the UK, free markets have boosted consumer's spending power by seeing competition force the prices of many goods to decline, while salaries have increased, Mr Bailey said.

"An environment of fierce competition has produced dramatic benefits for the consumer not only in terms of price but also in terms of quality and range of choice," he said.

Many of the foods produced by ABF, or clothes sold in the firm's 98-strong Primark chain, have declined in price by at least one third over the past 10 years.

"In that time the average weekly wage has increased by 44%," he said.

"People in work and their families are better off in real terms."

Global giant

Associated British Foods, which achieved sales of 4.4bn last year, employs 34,000 people worldwide.

Shares in the firm ended 19p up at 490p on Friday.

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See also:

14 Dec 00 | Business
Hostile path for EU takeover law
12 Dec 00 | Business
UK would block new EU takeover law
07 Dec 00 | Business
China's exports surge
08 Nov 00 | Business
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