EU Offering U.K. Just a Fraction of Astra’s Dutch Vaccine Output

The European Union is only prepared to let the U.K. take a small portion of AstraZeneca Plc’s output from the Netherlands as it battles to get its immunization program back on track.

As the two sides negotiate over how to divide up the limited supply of shots from a new Astra facility due to come on stream in the next few weeks, the EU is insisting that it should get the lion’s share because it has a far bigger population and because its vaccination program is running some way behind the U.K., according to two EU officials.

The formula for allocating supply should be based on the relative size of the U.K. and EU populations and there’s no way the EU will accept a 50/50 split, the officials added.

The EU is threatening to block shipments of vaccines to the U.K. unless it can reach an agreement with the British government and the European Commission, the bloc’s executive arm, is due to propose tougher controls on exports on Wednesday. The commission wants to make it easier to stop shipments leaving the EU if their manufacturers haven’t fulfilled their European commitments. Those criteria put AstraZeneca, set to deliver fewer than half the doses it promised in the first quarter, in the crosshairs.

The U.K. sent a former ambassador as a special representative to negotiate with the commission. The EU believes that Astra has double booked its production, so European officials have floated the possibility of sharing the output from a Dutch facility with Britain, according to diplomats familiar with the matter. The Leiden-based plant, run by the sub-contractor Halix, may produce about 5 million shots a month, according to press reports.

Commission Vice President Maros Sefcovic told reporters in Brussels Tuesday that the emphasis is on “fairness” when it comes to distributing the critical shots.

“We would proceed with a comprehensive assessment of the overall situation, of the supply materials, of investment, but also how in reality these exports have been completed if you look at the figures over the last couple of months,” he said.

The talks have shown some progress, with the two sides already discussing what the scope of a compromise would look like, according to one official who asked not to be identified because the process is private. Some of the issues raised have been what the reciprocal relationship should look like; whether a vaccine-sharing arrangement should include final doses or ingredients; and if it should take into account initial investments in the development process.

“We expect the EU to stand by its commitments not to restrict exports where companies are fulfilling their contractual responsibilities,” Jamie Davies, Boris Johnson’s spokesman, told reporters on Tuesday. “It’s important we work collaboratively with our international counterparts. We believe in free trade.”

The negotiations take place against a backdrop of mounting concern that the EU is facing another wave of spiraling infections and deaths from the pandemic that will force governments to impose yet more economic pain on their battered economies. German Chancellor Angela Merkel ordered a five-day lockdown over Easter following negotiations with state leaders that ran deep into the night while France and Italy have also tightened restrictions on activity in a bid to get the virus under control.

The commission said last week that it would re-evaluate how it exports vaccines to countries that don’t make supply available from their own manufacturers or that already have high vaccination rates. The U.K. is the largest recipient of doses made in the EU, receiving 10 million of 42 million shots export from the bloc so far.

The EU is looking at focused measures so any tougher restrictions won’t affect the Pfizer Inc. and Moderna Inc. vaccines, which have made up the bulk of the shots dispatched to the U.K. from Europe up to this point.

The EU mechanism has been used to block vaccine exports only once so far, when Italy said it would withhold an AstraZeneca vaccine shipment bound for Australia.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.