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
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)
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.