French film-makers get their claws on £35m of UK taxpayers’ cash to make Paddington movies

French film production company StudioCanal benefited from £35.8m of UK taxpayers’ cash to make a television series and three movies about British icon Paddington bear, with £13.4m alone handed out for the latest film which premiered on Friday.

StudioCanal’s owner, French media giant Vivendi, posted a net profit of £336.6m (€405m) last year on revenues which rose 9.5 per cent to £8.7bn (€10.5bn).

Its latest movie – Paddington in Peru – stars Emily Mortimer and Hugh Bonneville as the husband and wife team who adopt Paddington, a computer-generated bear voiced by James Bond actor Ben Whishaw. The three of them travel to the bear’s home country of Peru to go on a hunt for his aunt Lucy with Oscar-winner Imelda Staunton on dialogue duties.

According to industry analysts Comscore, it grossed £9.7m in the UK and Ireland across its opening weekend topping both of its predecessors and making it the biggest opening ever for StudioCanal.

Although much of the movie is set in South America, it was largely filmed at Sky Studios Elstree just outside London. The capital’s picturesque Primrose Hill area and the Shard skyscraper feature in the film whilst actual rainforest trees were planted on a patch of farmland just off the M25 in Hertfordshire to double for the Amazon. The filming locations shine a spotlight on the cost of the movie.

Budgets of movies are usually a closely-guarded secret as studios combine the cost of them in their overall expenses and don’t itemise how much they spent on each one. Movies made in the UK are exceptions to this.

They benefit from the government’s Audio-Visual Expenditure Credit (AVEC) which gives them a cash tax credit of up to 25.5 per cent of the money they spend there. To qualify for the reimbursement, at least 10 per cent of the production costs need to relate to activities in the UK. In order to demonstrate this to the government studios set up separate production companies in the UK for each movie they make.

The companies have code names so that they don’t raise attention with fans when filing for permits to film on location. The StudioCanal subsidiary behind Paddington in Peru is called Marmalade Pictures in a nod to the bear’s favourite condiment. Its latest accounts are for the period of almost 11 months to 29 October 2023 which coincided with the end of filming for the new film.

The accounts reveal that the company has spent a total of £205.3m since it was founded in 2012 to make the first Paddington movie. The latest accounts show £72.2m of costs for making Paddington in Peru along with the fourth series of an animated children’s show about the bear’s younger years which runs on Channel 5.

Since 2012 the company has clawed back £35.8m through the AVEC bringing its net spending to £169.5m. Filming in the UK drives employment and the accounts reveal that the crew peaked at 118 staff during production of the latest movie with total pay coming to £11.9m over the past 11 years. The film-makers also spend on services such as catering, security and special effects with Paddington’s digital doppelganger created by British firm Framestore.

The latest data from the British Film Institute (BFI) shows that every £1 handed to studios generates £8.30 of additional Gross Value Added benefit for the UK economy. However, critics claim that the impact isn’t felt outside the film industry and, testimony to this, when the rebate rate rose to 25% in 2014 government filings stated that it “is expected to have a positive impact on the film industry, but is not expected to have significant wider macroeconomic impacts.”