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Legal threat over Mint closure.

Byline: James O'Brien Business Staff

The Royal Mint is facing more legal action following claims the Birmingham Mint has been a victim of unfair competition. The leader of Birmingham's Liberal Democrat group, Coun John Hemming, said last night he was also informing the Office of Fair Trading about the plight now facing Birmingham Mint, on the edge of the Jewellery Quarter.

'The Royal Mint and the Government wanted to shut down the opposition while at the same time asset stripping Birmingham,' said Coun Hemming.

The Royal Mint is already facing a claim for damages from the Birmingham Mint and now further action is planned under the 1997 Competition Act. The action for damages was started when the Royal Mint pulled out of a contract which accounted for 40 per cent of the Birmingham Mint's turnover.

But time is running out to save the Birmingham Mint in Icknield Street - which has already stopped trading - and if action is not taken within the next two weeks it could be too late.

The business, which started stamping coins in 1794, went into administration two months ago but administrator KPMG corporate recovery has been unable to find a suitable buyer.

Half the remaining 20 staff, which had previosuly totalled more than 100, will leave their jobs tomorrow, with the rest kept on longer to help sell the assets.

The administators had been unable to reach a deal with those who expressed interest in taking over the business.

Coun Hemming said: 'The Birmingham Mint can still be rescued and with that 200 years of history associated with Birmingham but this requires the Government and council get behind the mint rather than hoping that it will go away.'

'The Royal Mint is the main culprit in this sad story. Firstly, they pulled out of a contract which provided 40 per cent of the Mint's turnover. Secondly, they have been using unfair competition against the Mint and they have bought some of the key assets of the mint, trying to asset strip the City of Birmingham.' He said central government needed to move away from using the Royal Mint as a monopoly provider in the UK and provide some contracts to the Birmingham Mint, which would guarantee revenue to maintain 'this historic business'. The contracts to purchase machinery used by the Birmingham Mint should be given up by the Royal Mint so that the asset stripping stopped.

Coun Hemming said the city council must also make it clear through planning procedures that land occupied by the Birmingham Mint was for industrial purposes and should not be made available for housing.

The land is owned by 3i and Wimpey, with Wimpey holding an option on it. Coun Hemming said if it were made clear the Mint should continue trading on its present site and it should not be used for housing, then it could have a future.

He urged the Royal Mint to pay compensation for breach of contract and also pay compensation to the Birmingham Mint for unfair competition.

He wants the city council and Advantage West Midlands, the regional development agency, to ensure this historic part of Birmingham's commercial sector continued to trade.

'We cannot let this go down without a fight. The city's MPs have failed the city. We have a slight chance of recovering this situation, but only if people act now,' said Coun Hemming.

A spokesman for the Royal Mint at Llantrisant, South Wales, said the Royal Mint has had to take restructuring measures which involved about 200 job losses. 'We have made an offer to purchase a small amount of equipment at the Birmingham Mint and that has been accepted. It includes items to allow us to upgrade our existing production facilities.'

The Royal Mint's results for the 2001-2002 show an operating loss of pounds 6.5 million - before an exceptional charge of pounds 12 million for restructuring - and sales down by 17.2 per cent on the previous year.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:May 29, 2003
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