MMD Shipping: state aid investigation as a Brexit battleground?

It is not often that Portsmouth, a former home town of mine, is mentioned in the Brussels bubble, but recently it was reported that MMD Shipping, a cargo handling company owned since 2008 by Portsmouth City Council, is being investigated by the Commission for alleged breaches of EU state aid rules. The company – which handles, amongst other things, vast quantities of bananas – was taken over by the council when it was on the verge of failing and is said to have subsequently received financial assistance that could have given it an unfair advantage over competitors. Unsurprisingly, reporting has focused on the fact that this is the first competition investigation launched by the Commission since the UK referendum in June and may not be concluded before the UK exits the EU.

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How has MMD Shipping fared in the eight years since it came into the ownership of the council? Not especially well, it appears. Portsmouth’s local newspaper reported in 2009 that the company was continuing to make losses. Although it seems to have broken even in 2010, employees were the subject of two major criminal investigations in subsequent years and in 2016 it has been dogged by industrial disputes. A local blogger has been highlighting a perceived lack of transparency in the council’s ownership of the company and asking some difficult questions. Portsmouth City Council’s stated intention when it bought MMD, to secure local jobs and infrastructure, was worthy, but it doesn’t seem to have made a great success of this unusual move.

The atmosphere in the council’s offices this week is no doubt tense. All the more so as back in March its members passed a motion declaring that the UK would be better off outside the EU, an action that foreshadowed the city’s 58% vote for Leave on June 23. If it were possible for the EU and its institutions to sink any lower in Portsmouth’s estimation, they will have done so now. But did the Commission choose this particular target as a further signal to Britain’s Brexiteers that they are not in for an easy ride?

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