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Monday, June 21, 1999 Published at 16:09 GMT 17:09 UK

Business: The Economy

EU deadlock over art and chocolate

British chocolate contains other vegetable fats

The UK had one victory and one defeat at a meeting of EU internal market ministers in Luxembourg.

It succeeded in postponing a decision on introducing compulsory royalties for works of art, which the UK government says will send much of its lucrative auction house business to New York.

[ image: UK auction houses had a narrow escape]
UK auction houses had a narrow escape
But Britain's 25-year old chocolate war with the continent is still on after Belgium scuppered efforts to resolve a wrangle which has raged since the UK joined the European Union.

EU trade ministers had been close to creating a European chocolate union when the talks broke down in bureaucratic bickering.

A deal would have meant free access to all EU markets for British chocolate without manufacturers having to alter the ingredients to satisfy purist chocaholic countries like Belgium and France.

But the deal on a new "chocolate directive" melted away as Belgium blocked the technical arrangements to let it go through.

Lord Simon, Minister for Trade and Competitiveness, said: "I am very disappointed that despite efforts made, not least by the UK, to conclude these long outstanding negotiations, it has not been possible to reach agreement on a new chocolate directive."

"This question must now be settled by Finland," which assumes the EU presidency on 1 July." said one official.

Messy compromise

Under proposals that were put before the meeting, chocolate with up to 5% vegetable fats would have been allowed as long as it was clearly labelled.

In addition, British milk chocolate would be allowed if it was marketed as "family milk chocolate" to indicate that it had a higher milk content than Continental chocolates.

Eight European countries currently ban the use of substitutes for cocoa butter in chocolate - but the position of the newer EU members who joined after 1973 has never been resolved.

Third world cocoa producers had also lobbied to keep the ban, fearing that they might lose out if the proportion of cocoa butter in EU chocolate was reduced.

Artful escape

However the UK did succeed for the second time a row in blocking a vote on proposals to tax the art market.

The proposals would have given artists, or their heirs, royalties on the resale of their works for up to 70 years after their death.

The payments would be on a sliding scale, amounting to 4% of the value of the art for the first 50,000 euros (£30,000).

"The UK are concerned that as presently drafted, the proposal will lead to trade in high value works of art being lost to markets in Geneva and especially New York," Lord Simon said.

The German government supported the UK in blocking the vote, believing that it was important not to over-ride Britain on an issue that it considers so important.

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