Twinings has been caught up in a row over the use of European Union grants worth millions of pounds to help finance its relocation to Poland.

The tea brand, which is owned by Associated British Foods, is closing its North Shields operation next year as production shifts to Swarzedz in Poland.

It received grants of €12m (£10.4m) from the EU, according to the Financial Times, from a development fund that aims to promote new investment. The fund’s rules dictate that its cash should not be spent on relocating facilities between EU member states.

“The application [for funding] was made because Twinings considered its business plans satisfied the relevant criteria and the grant would provide financial support for our investment in the latest technology and research and development,” the company said in a statement.

More than 200 jobs in North Shields will go as a result of the Polish relocation. Twinings is also halving its workforce in Andover in a related move.

The news comes after ABF today unveiled a rise in annual profits of 26% to £852m.

Read more
ABF hails ‘exceptional year’ as profits soar (9 November 2010)
Storm brews over Twinings cuts as workers plan protest (1 December 2009)
Jobs under threat as Twinings considers overseas production (7 November 2009)