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AstraZeneca (LSE:AZN) has indicated that it might relocate its vaccine manufacturing operations from the UK to the United States if ongoing discussions with the new Labour government over state aid cuts remain unresolved, according to a report by the Financial Times. The UK’s finance minister, Rachel Reeves, is proposing to reduce state support for the company’s vaccine center, slashing the previous commitment from approximately £90 million to £40 million.
The earlier commitment from the prior administration included up to £70 million in grants for establishing a facility in Speke, Liverpool, along with an additional £20 million allocated for research and development support from the UK Health Security Agency. Sources familiar with the situation have suggested that AstraZeneca might shift its manufacturing activities to India, where the company has previously produced vaccines.
In response to the report, an AstraZeneca spokesperson affirmed the company's dedication to advancing the project at Speke and noted that discussions with the UK government are ongoing. The spokesperson also refuted claims about potential relocations to the United States or India, stating that such discussions are not taking place.
The UK Treasury has echoed the commitment to supporting the planned investment in Speke, highlighting positive discussions with AstraZeneca to facilitate this development. In March, the Sunak administration outlined a plan to allocate £650 million to AstraZeneca, aimed at enhancing research, development, and vaccine manufacturing capabilities.
The situation underscores the tension between AstraZeneca and the new government regarding state aid, with potential implications for the company’s future manufacturing strategy and investment plans in the UK.
