The European Commission has opened a formal investigation into potentially illegal French state aid for the fruit and vegetable sector over an 11-year period, which could see growers and other beneficiaries forced to repay subsidies with interest.
The aid under scrutiny was granted by means of yearly contingency plans (plans de campagne) designed to counter the oversupply of French fruit and vegetables onto the internal market from 1991-2002. Means used included price support, support for temporary storage, destruction of products or support for processing. Subsidies may also have been paid to favour sales of French products outside the EU at times of crisis. The Commission believes the aid may have been worth up to € 50 million a year.
In a statement the commission declared: “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 organisation 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.
