Franse staatssteun aan slachthuizen en destructiebedrijven 1997-2002 toegestaan, indien vleesimporteurs vergoed worden (en)

The Commission adopted a final positive decision today authorising state aid of some €829 million granted for the public rendering service (SPE) between 1997 and 2002. The aid was for rendering plants to remove and destroy, free of charge, fallen stock and slaughterhouse waste not allowed for human consumption. Approval of the aid is subject to the requirement that France reimburse all that part of the levy imposed on meat imported between 1997 and 2000. Aid for specific meat businesses, in the form of exemption from the levy on meat purchases, infringes the rules and will have to be reimbursed.

The Commission initiated a formal investigation in 2002 because it had doubts as regards the compatibility of state aid granted in France between 1997 and 2002 for the public rendering service (SPE). The service was financed by means of a levy on meat purchases, called the `rendering levy', and by the national budget. Beneficiaries of the SPE included rendering plants, stock farmers and slaughterhouses, and butchers and cutting plants holding specified risk material.

The Commission has concluded that the state aid consisting of public funding of 100% of the cost of the rendering activities in question between 1 January 1997 and 31 December 2002 complies with the applicable competition rules. In particular, it is in line with the Community guidelines on state aid concerning TSE tests, fallen stock and slaughterhouse waste. On the other hand, the way this aid was funded between 1997 and 2000 was irregular because the levy on meat purchases was also imposed on products imported from other Member States. This is a serious infringement of the tax rules laid down in the EU Treaty. The Commission has therefore concluded that the aid paid between 1 January 1997 and 31 December 2000 complies with the rules on state aid provided that France recovers in full the part of the levy imposed on imported meat. France has undertaken to make this recovery and thus retroactively reverse the irregular funding. This undertaking to reimburse the part of the levy imposed on imported meat is without prejudice to the right to reimbursement of the levy on meat purchases which payers of the levy may have on the basis of other provisions of Community law. This relates in particular to the fact that France granted financial aid by means of the levy illegally, i.e. without notifying the Commission and obtaining its prior approval.

In the period 1 January 2001 to 31 December 2002, the funding of this aid was not irregular because, although the levy was imposed on imports, revenue from the levy went directly into the national general budget. Such payment into the national budget severs any link between the levy and the funding of public service measures.

As regards undertakings exempt from payment of the levy on meat purchases, the Commission has concluded that such exemption is an aid which violates the competition rules since it reduces costs without providing any incentive or requiring any counterpart by the beneficiaries. France will therefore have to recover this particular part of the aid.