1999/591/EC: Commission Decision of 9 June 1999 on the aid scheme implemented by the United Kingdom in favour of pig producers in Northern Ireland (notified under document number C(1999) 1602) (Only the English version is authentic)
Date: 1999-06-09
Institutions: European Commission
Subjects: Northern Ireland, State aid, United Kingdom, production aid, slaughter premium, swine

28.8.1999

EN

Official Journal of the European Communities

L 227/27

COMMISSION DECISION

of 9 June 1999

on the aid scheme implemented by the United Kingdom in favour of pig producers in Northern
Ireland

(notified under document number C(1999) 1602)

(Only the English version is authentic)

(1999/591/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

scheme was entered in the register of non-notified aid
under the number NN 95/98.

Having regard to the Treaty establishing the European
Communities, and in particular
subparagraph of
Article 88(2) thereof,

the first

(3)

Having called on interested parties to submit their comments
pursuant to the provision cited above (1) and having regard to
their comments,

Whereas:

I. PROCEDURE

(1) By letter of 13 August 1998, registered on 14 August
1998, the United Kingdom notified the Commission of a
new State aid scheme, the pig welfare slaughter scheme.
This scheme provided for the payment of aid to pig
producers in Northern Ireland of GBP 18 per pig to
cover the cost of the slaughter and rendering of surplus
pigs for which no normal market outlet can be found.
Since it appeared that the United Kingdom had put this
aid scheme into effect without awaiting approval by the
Commission, this aid scheme was entered in the register
of non-notified aid under the number NN 96/98.

(2) By

letter

registered

of 1 September 1998,

on
2 September 1998, the United Kingdom informed the
Commission that owing to a lack of response from
farmers,
the pig welfare slaughter scheme would be
replaced by a new aid scheme, the pig welfare slaughter
compensation scheme. In addition to the aid payments
for slaughter and rendering of surplus pigs envisaged
under the previous scheme, the new scheme provided
for compensation payments for producers of overweight
clean pigs (that is to say, pigs of a minimum live weight
of 110 kg excluding in-pig gilts and breeding sows and
boars) of up to GBP 30 per head. Since it appeared that
the United Kingdom had put this aid scheme into effect
without awaiting approval by the Commission, this aid

confirmed

Since in their letter of 27 October 1998, the United
that no aid
Kingdom authorities had
the pig welfare
payments had been made under
scheme had been
scheme, and since that
slaughter
entirely
slaughter
the
by
replaced
compensation scheme, the Commission decided to close
the file on aid NN 96/98, concluding that this measure
had been withdrawn by the United Kingdom.

pig welfare

(4) By letter dated 21 January 1999,

animal

the Commission
informed the United Kingdom of its decision to initiate
the procedure under Article 88(2) of the EC Treaty in
respect of the payment of compensation of up to GBP 30
the
per
letter,
Commission informed the United Kingdom of
its
decision not
to raise objections to the payments for
slaughtering and rendering surplus pigs. Comments from
the United Kingdom were received by letter dated
23 February 1999.

slaughtered.

In the

same

(5) The Commission decision to initiate the procedure was
the European
interested

published in the Official
Communities (2). The Commission invited
parties to submit their comments on the aid.

Journal

of

The Commission has received comments from the Ulster
Farmers’ Union,
Ireland Veterinary
the North of
Association, Ulster Pork and Bacon Forum and the
Northern Ireland Grain Trade Association.
It has
forwarded them to the United Kingdom, which was
given the opportunity to react; by letter of 3 May 1999,
the United Kingdom informed the Commission that it
did not wish to submit any further comments.

II. DESCRIPTION OF THE MEASURE

(6)

Following an accidental fire on 20 June 1998, the major
pig slaughtering plant in Ballymoney, Northern Ireland,
was destroyed, leading to the loss of an estimated 40 %

(1) OJ C 67, 10.3.1999, p. 6.

(2) See footnote 1.

L 227/28

EN

Official Journal of the European Communities

28.8.1999

of the slaughtering and butchering capacity for pigs in
the region. This led to severe financial and practical
difficulties for pig producers in Northern Ireland. Many
producers were left with nowhere to take their animals
for slaughter and butchering. By the middle of August
1998 the situation had become critical, with some
20 000 to 30 000 pigs awaiting slaughter, and the
position was deteriorating by the day. Consideration was
given to the possibility of transporting these animals to
slaughterhouses in Great Britain or the Republic of
Ireland, but the overall depressed market situation and
disease control restrictions militated against this. Thus
producers were left with an increasing number of
animals which were basically unsaleable. Furthermore, as
a result of the increasing backlog of pigs on the farms,
serious animal welfare problems had arisen due to
overcrowding and feeding difficulties. The animals were
faced with overcrowding, heat stress and tail-biting,
causing them unnecessary suffering.

to submit applications

(7) Under the pig welfare slaughter compensation scheme
commencing on
producers were given one week,
to have
1 September 1998,
overweight pigs entered for the scheme. The Northern
Ireland authorities arranged for, and met, the costs of the
slaughtering and rendering of the animals (about GBP 15
per animal). In addition, the producers were to receive
GBP 30 per animal, or 60 % of the adjusted Eurospec
price for Great Britain/Northern Ireland, whichever was
the
In total 15 571 overweight pigs were
slaughtered, and attracted compensation of GBP 30 each,
leading to a total compensation bill of GBP 467 130. To
this were added slaughter and disposal costs of about
GBP 232 800, bringing the total cost of the scheme to
about GBP 700 000. The scheme was open for one
week only, and the animals were slaughtered within
10 days and subsequently destroyed.

lesser.

(8)

In its decision to open the procedure, the Commission
considered that the payment of compensation of GBP 30
per pig slaughtered clearly constituted aid within the
meaning of Article 87(1) of the Treaty. The payments in
question were granted in favour of certain pig producers
in Northern Ireland. The withdrawal
from a market,
which according to the United Kingdom authorities
themselves was seriously depressed, of over 15 000 pigs
may threaten to distort competition and affect
trade
between Member States. Furthermore, the Commission
noted that the effect, and indeed the objective, of the aid
payments was
the
to provide financial
support
worst-affected pig farmers
in Northern Ireland. A
unilateral decision by a Member State to grant financial
support to certain producers in a market which is highly
integrated at Community level, and where substantial
intra-Community trade takes place must be considered
to threaten to distort competition.

for

In particular,

within the scope of that provision.
the
Commission doubted that a fire occurring at a single
processing facility could be considered to constitute an
exceptional occurrence, and noted that no aid was being
paid to the owner of the facility. Furthermore, the fire
had not caused any material damage to producers, who
were being compensated for economic losses alone.

(10) Nevertheless,

the Commission accepted that at

the
relevant time the Northern Ireland pig market was beset
by a very unusual combination of circumstances, and the
Commission therefore considered whether the aid might
fall within the scope of the derogation provided for by
Article 87(3)(c) of the Treaty. In view of the very specific
problems caused by the fire,
including a build up of
animals which had become virtually unsaleable, and the
resultant animal welfare problems,
the Commission
accepted that a one-off measure to remove surplus
animals could be considered to contribute to the
economic development of the sector. Accordingly, the
Commission decided to consider the aid of GBP 15 per
animal
to cover slaughter and rendering costs to be
compatible with the common market in accordance with
Article 87(3)(c) of the Treaty.

slaughtered.

in principle

In particular,
aids

in the absence of a counterpart

(11) However, the Commission doubted whether the same
considerations applied to the compensatory payment of
the
GBP 30 per animal
Commission noted that
in the
agricultural sector which are paid per unit of production
are regarded as operating aids which are transitory and
which,
from the
beneficiary,
in no way benefit the development of the
sector concerned. Furthermore, by paying compensation
for production which was otherwise unsaleable, the aid
conditions of
to distort
at
competition by reinforcing the competitive position of
the traders concerned. In this context, the Commission
also expressed doubts as to the extent
to which the
particular situation arising in Northern Ireland was due
to the fire, and to what extent
it was due to the
generally depressed state of the pig market at that time.

threatened

least

the

into

effect.

(12) The Commission also noted that the aid was notified on
1 September 1998, the same day that the scheme was
brought
therefore
The
considered that the aid had been granted by the United
Kingdom in breach of its obligations under Article 88(3)
of
the Treaty, since the Commission had not been
informed of the scheme in sufficient time to enable it to
submit its comments.

Commission

(9) Although the United Kingdom referred to Article
87(2)(b) of
the Treaty, and suggested that measure
should be regarded as aid to make good the damage
caused by an exceptional occurrence, the Commission
doubted that the aid measure could be considered to fall

(13) The Commission has received comments from the Ulster
Farmers’ Union (UFU), the North of Ireland Veterinary
Association (NIVA), Ulster Pork and Bacon Forum and

III. COMMENTS FROM INTERESTED PARTIES

28.8.1999

EN

Official Journal of the European Communities

L 227/29

the Northern Ireland Grain Trade Association (NIGTA),
all of which express support for the payment of the aid
and the arguments advanced by the United Kingdom.
The respondents contest
the view, expressed by the
Commission at the opening of the procedure, that the
fire should not be considered an exceptional event. One
respondent, whilst accepting that the fire represented a
normal entrepreneurial risk from the standpoint of the
owner of the facility, argued that it should be looked at
from the perspective of the pig producers, who lost 40 %
of processing capacity in Northern Ireland overnight.
From the producers’ perspective,
the fire cannot be
considered a normal entrepreneurial risk but should be
considered an exceptional occurrence.

the removal

that
from farms in Northern Ireland of
excess numbers of overweight pigs with no normal
market outlet, in order to prevent suffering, is a measure
that can be considered to facilitate the development of
certain economic activities. They agree that there was a
common interest in arranging for the humane slaughter
of animals for which no normal market outlet could be
found and with the description of the steps taken to
ensure that the animals were destroyed and not used for
human consumption. They
the
Commission’s view that the payment of the aid did not
affect
trading interests to an extent contrary to the
common tnterest.

therefore

support

(14) All

four

respondents emphasise the gravity of

the
welfare problem which had developed on pig farms in
Northern Ireland as a result of the fire and the necessity
of rapid remedial action on the part of the authorities.
The lack of market outlets for the pigs led to a build-up
of animals on the farms, leading to overcrowding, which
resulted in outbreaks of pneumonia,
tail-biting, rectal
prolapse and other consequent diseases. As the pigs
they became unsaleable, because pig
gained weight,
processing
to
accommodate animals exceeding 110 kg liveweight. The
NIVA describes the welfare situation as intolerable. The
NIVA and the UFU both consider that the payment of
compensation was justified, while the NIGTA considers
that
to pay
compensation in order to secure the cooperation of
farmers with emergency slaughter arrangements.

the government had no option but

are not built

and slaughter

lines

(15)

In this context

Furthermore, the respondents argue that the scheme did
not distort competition or affect trade between Member
the UFU submitted detailed
States.
information about
in
Northern Ireland before and after the fire, together with
evidence to suggest that the difficulties confronting the
producers were due to the fire and not to the general
depression in the pig industry.

the movement of pig prices

IV. COMMENTS FROM THE UNITED KINGDOM

(16)

In their comments,
the United Kingdom authorities
emphasise the importance of animal welfare, and their
belief that the actions undertaken were essential to end
the severe suffering of animals.

(17)

instance,

the United Kingdom authorities
In the first
to raise
the Commission’s decision not
welcome
objections
to the payment of aid of approximately
GBP 15 to cover the slaughter and disposal costs of the
animals concerned. They note that the decision is based
on the derogation provided for by Article 87(3)(c) of the
Treaty and accept and support the Commmission’s view

(18) Nevertheless,

the Treaty. They do not accept

the United Kingdom authorities

also
maintain as a matter of principle their opinion that the
fire at the Ballymoney processing plant did constitute an
exceptional occurrence within the meaning of Article
87(2)(b) of
the
sudden total inability of a producer to sell a product in
his usual market at any price, owing to circumstances
unrelated to the market situation, and without any
change in levels of consumer demand, coupled with the
almost total inability to transport this product for sale at
any price in other markets, due to restrictions on animal
movements, can be considered to fall within the normal
parameters of entrepreneurial risk.

that

(19) However,

the United Kingdom authorities limit

their
substantive comments to the doubts expressed by the
Commission about the compensatory payment of GBP 30
per animal which accompanied the payment of slaughter
and disposal costs.

(20) They accept that this measure constitutes an aid within

the meaning of Article 87(1) of the Treaty.

(21)

In view of the doubts expressed by the Commission that
this payment may constitute an operating aid and that
the aid measure at least threatens to distort competition,
the United Kingdom authorities seek to prove that the
measure in question can be considered to facilitate the
development of certain economic activities, that it has
not adversely affected trading conditions to an extent
contrary to the common interest, and that
it can
therefore qualify for the derogation in Article 87(3)(c) of
the Treaty.

(22) The rationale for the intervention of the United Kingdom
authorities was the exceptional animal welfare problem
developing on farms. Large numbers of animals were
suffering to an unacceptable degree. In support of this
the United Kingdom authorities provide
contention,
extracts
field visits of official
veterinarians to pig farms in Northern Ireland which
in
describe

from the reports of

instances

animals

housed

being

of

L 227/30

EN

Official Journal of the European Communities

28.8.1999

and

unsuitable

overcrowded,
uncomfortable
accommodation, animals not being properly fed, piglets
being drowned at birth, neck and tail-biting and fighting,
traumatisation and cannibalism. The existence of these
problems was confirmed by representations
received
from farmers themselves, from the farm Animal Welfare
Council,
and from the Association of Veterinary
Surgeons for Northern Ireland. A threefold increase in
the number of carcasses being rejected for neck lesions,
which is indicative of overcrowding, was also noted at
slaughterhouses. These problems were widely reported in
the news media in Northern Ireland. In view of these
concerns,
the Department of Agriculture Northern
Ireland (DANI) issued a press release to remind farmers
of their welfare obligations on 6 August 1998. However
also
action to alleviate
considered necessary.

the welfare problem was

(23) The United Kingdom authorities explain that during July
and August several options were considered to remove
the affected animals from the farms.

(24) The first option considered was the forcible removal of
the affected animals from farms using statutory powers
under the Welfare of Animals Act
(Northern Ireland)
1972 and the Police and Criminal Evidence Order
(Northern Ireland) 1989. These give the competent
authorities powers of entry onto farms, powers to seize
and detain animals which are being treated cruelly, and
powers to prosecute offenders. However, no powers are
granted to destroy or otherwise dispose of the animals
concerned. After careful consideration it was decided
that the practical difficulties involved in the seizure and
storage of a large number of animals, estimated at the
time at about 28 000 animals spread over 2 000 farms
were
to each farm by official
veterinarians, accompanied by police officers, would
have been necessary, and arrangements would have had
to be made to transport and store any animal suffering
from welfare problems. Furthermore, even if such an
operation had been put into effect, it would not have
provided a long-term solution to the problem, since the
animals would ultimately have had to be returned to the
owners.

insuperable. Visits

(25)

In the circumstances,
the United Kingdom authorities
decided that a solution to the problem would have to be
sought in cooperation with the owners of the animals.
introduced a scheme which would
They therefore
provide for payment by the State of
the costs of
slaughtering and disposing of pigs which had become
overweight since the fire, and whose retention was
giving rise to welfare problems. This was the pig welfare
scheme, notified to the Commission on 13 August 1998
and entered in the register of non-notified aid under aid
number NN 96/98. There was no response to this
scheme by producers.

(29)

(26) Given the urgency of the situation, the United Kingdom
authorities were then forced to consider the possibility

the producers for the removal of

of offering token compensation in order to secure the
the
cooperation of
affected animals. This offer was made with the sole aim
of removing the affected animals, and not with the aim
of providing any hidden support for the pig sector. The
United Kingdom authorities therefore consider that the
compensation payments were analogous to the payment
of GBP 15 for the slaughter and disposal of the animals,
and should be
the
derogation under Article 87(3)(c) of the Treaty in the
same way.

considered for

application of

(27) As

the

that

to the question of whether

the compensation
payments adversely affected trading conditions to an
the United
extent contrary to the common interest,
Kingdom authorities point out
level of
compensation was fixed in such a way as to avoid the
risk of overcompensation. Pig prices were monitored
the
during the week preceding the introduction of
scheme. The level of compensation chosen of GBP 30
per pig was in fact GBP 9,54 less than the average
market price in Northern Ireland during the previous
week, GBP 16,25 less than the market price in Great
Britain, and GBP 20,09 less than the price in the
Republic of Ireland during the same period. The United
Kingdom authorities consider that this is clear proof that
the compensatory payments did not exceed the market
price which would have been paid for the animals had
the Ballymoney plant
still been in operation. This,
together with the destruction of the animals, so that they
were not used for human consumption, minimised any
direct distortion of
the
the market
beneficiaries.

in favour of

(28) Whilst

recognising that

in theory the payment of
compensation to producers might be argued to threaten
to distort competition by reinforcing the competitive
position of the producers concerned, and thereby affect
trade between Member States,
the United Kingdom
authorities consider that such distortion was minimal
and in any case did not affect trading conditions to an
extent contrary to the common interest. They base this
on a detailed comparison of the evolution of pig prices
in Northern Ireland, Great Britain and the Republic of
Ireland in the weeks following the implementation of the
aid. They also cite the continued depressed state of the
Northern Ireland pig market which means that
there
were some 300 fewer pig producers in December 1998
than in June 1998.

had

very

been

pig market

In addition, the United Kingdom authorities note that
before the fire at the Ballymoney plant, the Northern
Ireland
substantially
self-contained, with only a very limited number of
shipments to Great Britain in May and June 1998 (1 214
animals in total) and none at all to the Republic of
increased
fire,
Ireland.
substantially as producers sought to find new outlets.
This increase in shipments out of Northern Ireland
meant that the backlog of animals which had built up in
July and August 1998 did not recur. However,
this
solution could not be found immediately, since it took

Following the

this number

28.8.1999

EN

Official Journal of the European Communities

L 227/31

time to set up the arrangements necessary to ensure that
shipments to Great Britain complied, inter alia, with the
conditions set out in Commission Decision 93/24/EEC (3)
in relation to Aujeszky’s disease and the certification
requirements imposed by the Irish authorities in respect
of porcine respiratory and reproductive syndrome.

(30) The United Kingdom authorities conclude by noting that
had the effeet of the aid been to place Northern Ireland
producers at a competitive advantage, pig producers
elsewhere in the United Kingdom would have been
disadvantaged most significantly. They consider that this
was not the case, and that the aid would not have had a
greater impact on producers in other Member States.
The United Kingdom authorities therefore conclude that
the aid has not affected trading conditions to an extent
contrary to the common interest, and that the measure
may therefore qualify for derogation under Article
87(3)(c) of the Treaty.

V. ASSESSEMENT

Article 87(1)

distort competition and thereby affect
Member States.

trade between

(34)

In their letter of 23 February 1999, the United Kingdom
authorities have expressly recognised that the measure
constitutes an aid within the meaning of Article 87(1) of
the Treaty. There is therefore no need to examine this
aspect.

(35) The prohibition on State aid contained in Article 87(1)
of the Treaty is not unconditional; Articles 87(2) and (3)
contain a
series of derogations. The derogations
contained in points (a) and (c) of Article 87(2) are
manifestly inapplicable as are the derogations contained
in points (a), (b) and (d) of Article 87(3). Neither the
United Kingdom, nor any of
the parties submitting
comments have suggested that any of these derogations
In order to
could apply to the measure in question.
justify the aid,
the United Kingdom has referred to
Article 87(2)(b) of the Treaty, and has suggested that
measure should be considered aid to make good the
occurrence.
damage
Alternatively, the United Kingdom has suggested that the
aid may be considered to facilitate the development of
certain economic activities without adversely affecting
trading conditions to an extent contrary to the common
interest, and may therefore qualify for derogation under
Article 87(3)(c). It is therefore necessary to examine each
of these provisions.

exceptional

caused

by

an

(31) Article 21 of Council Regulation (EEC) 2759/75 of
29 October 1975 on the common organisation of the
market in pigmea (4) provides that Articles 87, 88 and
89 of the Treaty shall apply, save as otherwise provided
in the Regulation, to the production of, and trade in the
products referred to in Article 1 of the Regulation.

Article 87(2)(b)

(32) Article 87(1) of the Treaty provides that any aid granted
by a Member State or through State resources which
distorts or threatens to distort competition by favouring
certain undertakings or the production of certain goods
shall, in so far as it affects trade between Member States,
be incompatible with the common market.

(33)

In its decision to initiate the procedure, the Commission
took the view that
the measure in question clearly
constitutes aid within the meaning of that provision. The
payments in question were granted by the authorities of
the United Kingdom in favour of certain pig producers
in Northern Ireland. Those payments provided financial
compensation for
the destruction of animals which
according to all the parties concerned were unsaleable
under market conditions. A unilateral decision by a
Member State to grant
to certain
producers in a market which is highly integrated at
Community level and is subject to a common market
intra-Community
organisation, and where substantial
trade takes place, must be considered to threaten to

financial

support

(3) OJ L 16, 25.1.1993, p. 18.
(4) OJ L 282, 1.11.1975, p.1.

(36) Article 87(2)(b) of the Treaty provides that aid to make
good the damage caused by an exceptional occurrence is
to be considered compatible with the common market.

(37)

In general

In its decision to initiate the procedure, the Commission
expressed serious doubts as to whether the conditions
for the application of this provision were fulfilled in this
the
case.
the Commission considered that
possibility of
the closure of processing capacity as a
result of an accidental event should be considered a
normal entrepreneurial risk rather than an exceptional
occurrence. In this context, the Commission, noted that
the fire, although extensive, was limited to a single
facility.
In no case had the Commission hitherto
accepted that a fire at a single processing plant could be
considered an exceptional occurrence. Furthermore, no
aid was being paid to the owner of the facility itself,
covered by normal
who in fact
commercial fire insurance.

appeared to be

(38)

So far as the effects of the fire on the Northern Ireland
pig producers were concerned, the Commission noted
that the fire did not cause any material damage to their
production facilities. The losses they incurred were as a
result of an inability to find alternative market outlets to
sell pigs which would otherwise have been sold for

L 227/32

EN

Official Journal of the European Communities

28.8.1999

the Ballymoney plant. Furthermore,

processing at
the
the losses
Commission was unsure to what extent
sustained by the producers were caused by the fire at the
Ballymoney plant and to what extent
they were the
result of the generally depressed state of the pig market
at the relevant time.

(39)

In their written observations,
the United Kingdom
authorities maintain, as a matter of principle, their point
the fire should be considered an
of view was that
exceptional occurrence, but do not introduce any new
arguments in this respect. The respondents also maintain
that
the fire should be considered as an exceptional
occurrence, with the exception of the Ulster Farmers’
Union, which maintains that the fire was a normal risk
for the owners of the processing plant, but not for the
producers who depended on that plant to accept their
pigs and who were severely disadvantaged by an event
entirely outside their control.

considers that in normal commercial transactions there
is always a degree of risk, albeit small, that one of the
parties may cease trading for reasons which are beyond
the control of the other parties. Such events do not
constitute exceptional occurrences within the meaning of
Article 87(2)(b) of the Treaty, although they may justify
the payment of aid under other provisions of Article 87,
provided that the conditions laid down therein are met.

Article 87(3)(c)

(45) Article 87(3)(c) provides

that aid to facilitate

the
development of certain economic activities or of certain
economic areas may be considered compatible with the
such aid does not
common market provided that
adversely affect trading conditions to an extent contrary
to the common interest.

(40)

In the light of the information provided by the United
Kingdom authorities and the respondents, which is
discussed below, the Commission accepts that the fire at
the Ballymoney plant would have caused substantial
difficulties
in Northern Ireland,
whatever the general state of the pig market at the time
when the fire occurred.

for pig producers

(46)

(41) Nevertheless, the Commission remains of the opinion
the Ballymoney facility cannot be
an exceptional occurrence

that
considered to constitute
within the meaning of Article 87(2) of the Treaty.

the fire at

In its decision to initiate the procedure under Article
88(2) of the Treaty, the Commission accepted that the
payment of GBP 15 to cover the slaughter and disposal
costs of surplus pigs qualified for the derogation under
it expressed
Article 87(3)(c) of
doubts whether the same considerations could apply to
the payment of compensation of GBP 30 per pig
slaughtered on the grounds
this appeared to
constitute an operating aid. The United Kingdom and all
the other respondents contest this assessment.

the Treaty. However,

that

derogations

it is necessary to point out that,
In the first instance,
being
general principle of
from the
incompatibility of State aid contained in Article 87(1),
the provisions of Articles 87(2) and (3) are to be
interpreted restrictively.

(47) Before the fire on 26 June 1998, the total number of
pigs slaughtered in Northern Ireland was about 41 500
per week, of which about 16 500 were slaughtered and
processed at the Ballymoney plant. The fire resulted in
the total loss of this capacity.

Secondly, the Commission notes that as regards material
loss, the main victims of the fire, the owners of the
Ballymoney facility, are not receiving aid. Furthermore,
none of the respondents has contradicted the statement
in the opening of the procedure that it appears that the
owners were
fire
insurance. The Commission therefore concludes that as
the fire must be
regards the owners of
considered to constitute a normal commercial risk, and
cannot
exceptional
occurrence.

covered by normal

the facility,

commercial

considered

therefore

an

be

(44) The Commission cannot accept the argument that the
fire should nevertheless be considered to constitute an
exceptional occurrence because the Northern Ireland pig
producers were suddenly deprived of the main outlet for
their production due to circumstances entirely beyond
their control. In economic terms the effects of the fire
are the same as if the plant had closed for other reasons,
for example because it was not profitable, or as a result
the owners. The Commission
of

the insolvency of

(48)

limited.

In their observations,
the United Kingdom authorities
have shown that the available alternative outlets for this
the
production were
extremely
in
remaining slaughtering and processing facilities
Northern Ireland had been able
their
slaughter capacity, for example by working longer hours,
slaughter and processing capacity was
their overall
the necessary processing
limited by the absence of
facilities, in particular cold storage facilities.

to increase

Even

if

(49) As regards the possibility of arranging for the pigs
concerned to be
slaughtering and
transported for
processing outside Northern Ireland, the only two export
markets of economic significance for
for
Northern Ireland are the Republic of Ireland and Great
from
Britain. However
Northern Ireland to Great Britain is limited, inter alia, by
the conditions set out in Decision 93/24/EEC in relation
to Aujeszky’s disease, while the possibility of moving
animals from Northern Ireland to the Irish Republic is
Irish
limited by

the option of

shipping pigs

imposed by

conditions

live pigs

the

the

(42)

(43)

28.8.1999

EN

Official Journal of the European Communities

L 227/33

for

certification

requirements

authorities
porcine
respiratory and reproductive syndrome. The figures
provided by the United Kingdom authorities show that
in the period immediately before the fire the Northern
Ireland pig market was almost entirely self-contained. No
pigs at all were transported to the Irish Republic in May
and June of 1998 and just 1 214 pigs (less than 0,5 % of
total production) were shipped to Great Britain. After
the fire, strenuous attempts were made by the sector to
find alternative outlets, but
it was not until October
the volume of animals transported from
1998 that
Northern Ireland exceeded the volume being processed
at Ballymoney immediately before the fire.

(54)

(50)

(51)

In the meantime a substantial backlog of animals was
building up on farms in Northern Ireland. This backlog
was accelerating rapidly because of the relatively short
production cycle for pigs (in practice about five months),
leading to overcrowding. Furthermore, it is necessary to
note that a large number of animals were becoming
practically unsaleable because once pigs reach a certain
weight (about 110 kg) they become too heavy to be
handled by the equipment in pig slaughter houses. The
aid scheme implemented by the United Kingdom was
solely intended to provide for the removal from farms
and humane slaughter of these overweight pigs.

It is clear that as a result of the overall situation, severe
animal welfare problems were developing on farms. This
is documented by the reports of on-the-spot inspections
carried out by official veterinarians, by representations
made by independent veterinarians to the competent
authorities at
the
North of Ireland Veterinary Association submitted to the
Commission in the context of this procedure.
Indeed
such was the level of concern that on 6 August 1998
the Department of Agriculture for Northern Ireland
issued a press release to remind pig farmers of their
welfare obligations.

the time and in the comments of

(52) Against this background, the United Kingdom authorities
first considered the possibility of
invoking their legal
powers to remove the affected animals from farms.
However, they concluded that this was impracticable for
operational and logistic reasons, and would not in any
case
recital 23). The
Commission accepts these explanations.

the problem (see

resolve

(53) The United Kingdom authorities

then introduced a
limited aid scheme under which aid would be paid solely
the
to cover

the cost of slaughter and disposal of

animals concerned. However not a single producer
participated in this scheme (recital 24).

scheme,

ensuring

it noted

aid to alleviate

in particular by

the Commission noted that at present

In its decision to initiate the procedure under Article
88(2),
the
Commission does not have a well-defined policy on the
animal welfare
payment of State
problems. Nevertheless
that Community
legislation has been concerned with this question, laying
down certain minimum welfare standards. Furthermore,
the Commission noted that
the United Kingdom
authorities had taken measures to minimise the effects of
the
the
slaughtered animals were destroyed and not used for
therefore
The
human
considered that
from farms in Northern
the removal
Ireland of excess numbers of overweight pigs which
have no normal market outlet, and their slaughter under
humane conditions, was a measure which could be
considered to facilitate the development of certain
the explanations
economic activities.
provided by the United Kingdom authorities,
the
Commission now accepts that the decision to pay token
after
compensation to producers was
taken only
the alternatives, and was
exhaustive consideration of
necessary in order
to secure cooperation from the
producers.

In the light of

consumption.

Commission

that

(55) The Commission therefore concludes that the measure
can be regarded as analogous to the decision to pay
GBP 15 to cover the slaughter and disposal costs of the
animals concerned.

(56)

Since the measure can in principle be accepted as aid to
facilitate the development of certain economic activities,
it is necessary to consider whether the aid has in fact
affected trading conditions to an extent contrary to the
common market.

(57) As the United Kingdom authorities point out in their
observations, the aid of GBP 30 per pig was in fact
substantially below the average Northern Ireland pig
price during the week preceding the week in which the
scheme applied. The table below summarises average pig
prices
in Great Britain, Northern Ireland and the
Republic of Ireland, expressed in pounds sterling, in the
week before the Ballymoney fire, the week immediately
before the scheme was introduced, and the four weeks
after the scheme, when the effects of the withdrawal of
the slaughtered pigs would be at their greatest.

Producer prices per pig in GBP, week ending

14.6.1998

30.8.1998

6.9.1998

13.9.1998

20.9.1998

27.9.1998

Great Britain

64,33

46,25

44,86

43,03

43,41

42,92

Northern Ireland

59,55

39,54

37,45

35,90

35,15

34,17

Republic of Ireland

57,51

50,09

50,00

50,39

51,26

50,70

L 227/34

EN

Official Journal of the European Communities

the scheme, as a result of

(58) These figures show that while prices in all three markets
had fallen between the date of the Ballymoney fire and
the introduction of
the
generally depressed state of the sector, the fall in prices
in Northern Ireland had been somewhat greater.
Moreover, even after the introduction of the scheme,
prices continued to fall in Northern Ireland at a faster
rate than in Great Britain, while prices in the Republic of
Furthermore,
Ireland
throughout
the amount of aid
remained substantially below the market price for pigs in
Northern Ireland.

the relevant period,

remained

broadly

stable.

(59)

(60)

(61)

In addition, the amount of aid paid, which represented
the only return for the producers, was substantially
below the cost of production of the animals concerned.
Since they had to carry a large proportion of the loss, it
appears extremely unlikely that
the aid might have
strengthened the competitive position of the beneficiaries
at the expense of other producers to an extent beyond
that which was strictly necessary to attain the objectives
of the scheme.

For the reasons given above, the Commission considers
that the aid of GBP 30 paid to certain pig producers in
Northern Ireland in order to secure their cooperation in
the humane removal
from farms and destruction of
overweight surplus pigs which had no normal market
outlet can be considered to facilitate the development of
the Northern Ireland pig sector without adversely
affecting trading conditions to an extent contrary to the
common interest.

Furthermore, given that the aid was granted for animal
welfare reasons only in respect of overweight pigs,
in order to reduce
which were otherwise unsaleable,
overcrowding on farms, and given that
the United
the meat obtained
Kingdom authorities ensured that
from such animals was destroyed and not used for
lastly, given the limited
human consumption and,
amount of compensation paid,
the Commission also
considers that it can rule out the possibility that the aid
measure interfered with the mechanisms of the common

28.8.1999

in a manner

organisation of
contrary to Regulation (EEC) 2759/75.

the market

in pigmeat

VI. CONCLUSIONS

(62) The Commission finds that

the United Kingdom has
unlawfully
slaughter
implemented the pig welfare
compensation scheme contrary to Article 88(3) of the
the
Treaty. However,
Commission considers that the aid scheme meets the
conditions for the application of the derogation provided
for by Article 87(3)(c) of the Treaty,

the reasons given above,

for

HAS ADOPTED THIS DECISION:

Article 1

The State aid of GBP 30 per pig slaughtered under the pig
welfare slaughter compensation scheme implemented in the
United Kingdom (Northern Ireland)
in September 1998 is
compatible with the common market within the meaning of
Article 87(3)(c) of the Treaty.

Article 2

This Decision is addressed to the United Kingdom of Great
Britain and Northern Ireland.

Done at Brussels, 9 June 1999.

For the Commission

Franz FISCHLER

Member of the Commission