www.checkbiotech.org ; www.raupp.info ; www.czu.cz

Biotech associations from five European countries have joined an initiative
aimed at creating and developing globally competitive R&D-driven companies,
November 2005 by Anthony Fletcher.

Representatives from Sweden, Finland, Norway and Estonia believe that the
Young Innovative Company (YIC) status scheme will encourage further
development of biotechnology, and the move could help to counter entrenched
opposition to GM (genetically modified) crops within Europe.

The project is supported by France Biotech, the French biotech association,
EuropaBio, the European Association for Bioindustries, and is funded by the
European Commission.

Europe represents a challenging environment for biotech firms. The
development of GM ingredients, an important sector of the biotech industry,
are regarded with some suspicion by consumers in Europe and as such are used
infrequently in food formulations by food manufacturers who do not want to
see sales fall.

The EU did however recently approve imports of the maize product 1507,
jointly made by DuPont subsidiary Pioneer Hi-Bred International and Dow
AgroSciences unit Mycogen Seeds. This is the fifth new GMO approval since
the EU ended its informal biotech ban last year.

According to EuropaBio, 1507 maize meets all the latest EU regulatory
requirements ? part of the condition for the termination of the EU
moratorium on new GMO approvals - and has been judged by the European Food
Safety Authority to be as safe as conventional maize.

But this decision was only reached after ministers were unable to agree
among themselves. An obscure facet of the law known as the 'comitology
procedure', means that Brussels can actually push through laws if the
council has failed to reach a majority decision.

In fact, despite last year's lifting of the GM moratorium, EU countries have
not managed to agree by themselves on a GMO approval since 1998.

The achievement of YIC status could therefore help small ambitious companies
operate in difficult circumstances. The initiative is based on social cost
and tax exemptions, allowing companies to re-invest the savings in R&D.

The industry believes that higher investment in R&D will help to reduce the
time-to-market of internally developed products and technologies.

The YIC scheme has proliferated rapidly. In 2004, France was the first
country to adopt a YIC-based fiscal regime, exempting companies up to eight
years old from all taxes and social contributions. Today, more than 1,000
French companies have opted for the YIC status, including 150 biotech
companies.

Earlier this year, the Belgian government also decided to adopt a YIC-based
status in mid-2006, and will consequently be the second European country to
implement an initiative to support the development of young companies in
this way.

Now, Sweden, Finland, Norway and Estonia could be the next to introduce the
status.

?Tax incentives are very important for the development of new innovative
biotech companies in Europe,? said Per Vretblad, head of biotechnology at
SIK - the Swedish Institute for Food and Biotechnology.

?We will work for a rapid introduction of such measures.

Per-Erik Sandlund, chief executive of SwedenBIO, pointed out that the
Swedish life science industry employs more then 41,000 people. He believes
that tax incentives are an important step to further increase and develop
the business.

[www.nutraingredients.com]

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