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July 22, 2005, as reported by just-food.com: France’s
subsidy program is under investigation by the European
Commission for alleged competition thwarting aid packages
awarded to its fruit and vegetable growers.
The EC has opened a formal investigation into potentially
illegal state aid granted by France between 1991 and
2002 in the fruit and vegetable sector.
The aid was granted by means of yearly ‘contingency
plans’, the commission said. It included measures
designed to counter the oversupply of French fruit and
vegetables on the internal market by means of price
support, support for temporary stockage, destruction
of products or support for processing. Subsidies may
also have been paid to favor sales of French products
outside the EU at times of crisis. Support would seem
to have been as high as €50m (US$61m) per year.
The commission doubts that such measures may be considered
compatible with competition rules, as they would seem
to interfere with the good functioning of the common
market organization for fruit and vegetables. The commission
is in possession of documents showing that there was
awareness that the support measures violated common
market rules, and that the aid should be kept confidential.
The commission decision to open the procedure on this
aid will be published in the Official Journal of the
European Union. France must, however, directly inform
the beneficiaries that a formal investigation has been
opened on these measures. Third parties may submit their
comments within one month of publication of the opening
decision.
The commission intends to take a final decision within
18 months. If the aids are confirmed to be incompatible
with state aid rules, they will have to be clawed back
from the beneficiaries. Reimbursement would have to
include interest from the day of receiving the aid.
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