2006/249/EC: Commission Decision of  20 April 2004  on the State aid which Italy intends to provide to firms marketing beef and veal in the province of Brescia  (notified under document number C(2004) 1377)
Date: 2004-04-20
Institutions: European Commission
Subjects: Italy, State aid, aid to undertakings, beef, control of State aid, distribution business, originating product, product quality, small and medium-sized enterprises

29.3.2006

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Official Journal of the European Union

L 91/11

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 20 April 2004

on the State aid which Italy intends to provide to firms marketing beef and veal in the province
of Brescia

(notified under document number C(2004) 1377)

(Only the Italian text is authentic)

(2006/249/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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

Having invited interested parties to make their comments
pursuant to that Article,

Whereas:

I. PROCEDURE

(1)

(2)

By letter of 27 July 2001, registered as received on 1
August 2001, the Office of the Italian Permanent Repre-
sentative
the
Commission of aid for the purchase of equipment to
ensure the provenance and quality of beef and veal.

European Union

notified

the

to

By letters of 15 October 2001 (registered as received on
16 October 2001) and 26 February 2002 (registered as
received on 27 February 2002), the Office of the Italian
Permanent Representative to the European Union sent
the Commission the additional
information requested
from the Italian authorities by letters of 12 September
2001 and 28 November 2001.

(3)

(4)

(5)

(6)

By letter of 24 April 2002, the Commission notified Italy
of
that aid the
procedure provided for in Article 88(2) of the EC Treaty.

its decision to initiate in respect of

The Commission decision to initiate the procedure was
published in the Official Journal of the European Commu-
nities (1) on 18 June 2002. The Commission invited
interested parties to submit their comments on the aid
in question.

The Commission received no comments from interested
parties.

By letter of 25 June 2002, registered as received on 27
June 2002,
the Commission further infor-
mation on the planned measure.

Italy sent

II. DESCRIPTION

Title

(7)

Aid for
provenance and quality of beef and veal.

the purchase of equipment

to ensure the

Amount of the aid

(8)

budgeted

Funds
to
€103 291,38 (ITL 200 million), to be provided by the
Brescia Chamber of Commerce.

this measure

amounted

for

(1) OJ C 145, 18.6.2002, p. 2.

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Duration

(9)

To the end of 2001.

Beneficiaries

(16) Applications made before the date of publication of call
for expressions of interest are not eligible. The grant of
the aid is in any case subject to its approval by the
Commission.

(10)

(11)

(12)

Small and medium-sized firms employing no more than
20 people whose registered office and operations were
located in the province of Brescia, which had no pending
disputes with social security bodies, were up to date with
their contributions to the Chamber of Commerce, were
not in administration, had not compounded with their
creditors and were not bankrupt.

III. INITIATION OF THE PROCEDURE UNDER ARTICLE
88(2) OF THE EC TREATY

(17)

The Commission initiated the procedure under Article
88(2) of
to
whether the scheme was compatible with the common
market.

the Treaty because it had doubts as

Description of the aid

(18)

The first ground for its doubts arose from certain gaps in
the information communicated by Italy.

linked to a computer

The aid measure was to contribute to the purchase of
scales
system (hardware and
software) which could certify the provenance of beef
and veal and the inspection by the Brescia Centre for
the qualitative improvement of milk and beef and veal.

In the original version of the measure, the beneficiaries of
the aid were small and medium-sized firms in the
services sector which sold meat and, to a much lesser
extent, firms selling meat direct to consumers. However,
the latter category is now excluded, as the Italian autho-
rities stated in their letter of 25 June 2002. In the final
version only small and medium-sized firms engaged in
marketing (slaughterhouses) which sell certified beef and
veal are eligible.

(19)

First of all, the Italian authorities had provided no infor-
mation on compliance with minimum environmental,
hygiene and animal welfare standards. The Chamber of
Commerce simply noted that compliance with these
standards was not
for which it was
something
responsible.

(20)

Secondly,
the Chamber of Commerce made no
comments on the existence of market outlets for the
products in question.

(13)

In the original version of
modulated as follows:

the measure,

the aid was

(21)

Because of these omissions, the Commission had doubts
about compliance with some of the conditions laid down
at points 4.2 and 4.3 of the Community Guidelines on
State aid in the agricultural sector.

40 % of
marketing firms;

the purchase price of

the scales for meat-

50 % for firms selling meat direct to the consumer in the
disadvantaged areas of the province;

40 % for firms selling meat direct to the consumer in the
non-disadvantaged areas of the province.

However,
following the exclusion of the firms selling
meat direct to the consumer, the intensity of the aid is
now 40 %.

(14)

The contribution granted to each firm may not exceed
€1 291,15 (ITL 2,5 million).

(15)

This aid may not be cumulated with other aid granted by
the State or other public bodies.

the

(22) A further problem which arose during the preliminary
enquiry was the check on the non-cumulation of grants.
In view of
the
the organisation of
scheme,
Commission suggested establishing,
in liaison with the
Region of Lombardy, a system for checking on the
non-cumulation of the aid. In the further information it
sent
the Chamber of Commerce
expressed its willingness to check 10 % of the appli-
cations made. The Commission considered that figure
inadequate because it could not exclude the possibility
of beneficiaries
from a number of
receiving grants
sources and so exceeding the eligible percentages.

to the Commission,

IV. COMMENTS BY ITALY

(23)

Italy undertook to grant

In its letter of 25 June 2002, registered as received on 26
the aid only to
June 2002,
slaughterhouses marketing beef and veal certified in
accordance with the rules laid down by the Ministry of
Agricultural and Forestry Policies. These holdings had
been previously inspected for compliance with environ-
mental, hygiene and animal welfare standards.

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(24)

Italy also stated that the existence of market outlets was
assured by the fact that beneficiaries were firms engaged
in retail trade.

considered compatible with the common market if it is
found to facilitate the development of certain economic
activities or of certain economic areas, where such aid
does not adversely affect trading conditions to an extent
contrary to the common interest.

(25) As regards compliance with the criterion of the non-
cumulation of aid, the Italian authorities gave assurances
that the rules on cumulation would be checked for all
beneficiaries in liaison with the Region of Lombardy.

(32)

V. APPRAISAL OF THE AID

by

(26) Under Article 87(1) of the EC Treaty, any aid granted by
a Member State or through State resources in any form
whatsoever which distorts or threatens to distort compe-
the
undertakings
certain
favouring
tition
in so far as it affects
production of certain goods is,
trade between Member States,
incompatible with the
common market. The measures covered by the decision
the
in question correspond to this definition for
following reasons.

or

To benefit from the derogation referred to in Article
87(3)(c) of the Treaty, aid for investments in the sector
of the processing and marketing of agricultural products
must comply with the relevant provisions of Regulation
(EC) No 1/2004 on the application of Articles 87 and 88
of the EC Treaty to State aid to small and medium-sized
enterprises active in the production, processing and
marketing of agricultural products (2). Where that Regu-
lation does not apply, or if all the requirements laid
down are not met, the aid must be appraised in the
the Community
light of
guidelines for State aid in the agriculture sector (3) (here-
inafter referred to as ‘the Community guidelines’.

the relevant provisions of

(27)

The finance provided by the Chambers of Commerce
may be regarded as public finance within the meaning
of Article 87(1) of the Treaty since firms are required to
join these public law bodies and pay subscriptions to
the Commission has
in the past,
them. Furthermore,
regarded measures adopted by Italian Chambers of
Commerce as State aids (1).

(28)

The measures favour certain small and medium-sized
firms engaged in the marketing of agricultural products.

(29)

The measures may have an effect on trade in view of the
the marketing of processed products
importance of
(which account
for a substantial part of agricultural
in 1998 Italy imported agricultural products
trade: e.g.
worth ECU 15,222 billion and exported products worth
ECU 9,679 billion; during that year trade in agricultural
products within the EU amounted to ECU 128,256
billion in imports and ECU 132,458 billion in exports).

(30) However, in cases covered by Article 87(2) and (3) of the
Treaty, some measures may enjoy derogations to be
considered compatible with the common market.

(31)

The only possible derogation in this case is laid down in
according to which aid may be
Article 87(3)(c),

(33)

Since the scheme in question is limited to small and
medium-sized firms engaged in marketing, Regulation
(EC) No 1/2004 applies. In particular, the appraisal of
the compatibility of aid for investment in the processing
and/or marketing of agricultural products must be based
on Article 7 of that Regulation.

(34) Under Article 7 of Regulation (EC) No 1/2004, aid for
investment in the processing and/or marketing of agri-
cultural products may be granted provided it satisfies the
following conditions:

a)

the aid may be granted only to agricultural holdings
which are economically viable;

b) these firms must comply with minimum standards as
regards the environment, hygiene and animal welfare;

c)

the intensity of
the aid may not exceed 50 % of
eligible investments in the Objective 1 regions and
40 % elsewhere;

d) eligible

expenditure
and improvement of

includes

purchase
machinery and equipment, general expenditure;

the
real

construction,
estate, new

(1) See Aid N 708/2000, approved by the Commission on 24 January

2001 (letter SG (2001) D/285437).

(2) OJ L 1, 3.1.2004, p. 1.
(3) OJ C 232, 12.8.2000, p. 19.

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e)

the existence in
there must be adequate proof of
future of normal market outlets for the products in
question. An assessment of the existence of normal
market outlets should be carried out by a public body
or a third party independent of the beneficiary of the
aid;

f) aid should not be restricted to a specific agricultural

product.

(35) However,

the description of

the measure shows that,
contrary to the requirement at f) above, this investment
is restricted to the beef/veal sector. Accordingly, not all
the criteria laid down in Regulation (EC) No 1/2004 are
satisfied and so the aid should be appraised in the light
of the Community guidelines.

compounded with their
ensure compliance with the criterion at a).

creditors or are bankrupt,

in their

the Treaty,

(39) As far as the minimum rules as regards the environment,
hygiene and animal welfare are concerned, which was
the reasons why the Commission initiated
one of
proceedings under Article 88(2) of
the
letter of 25 June 2002,
Italian authorities,
undertook to grant
the aid only to slaughterhouses
which marketed beef and veal which was certified in
accordance with the rules authorised by the Ministry of
Agricultural and Forestry Policies. These holdings had
already been checked as regards their compliance with
the rules on the environment, hygiene and animal
welfare. Accordingly,
criterion at b) may be
considered to have been met.

the

(36)

In the information which it sent by the letter of 25 June
2002, the Italian authorities stated that the aid would be
granted only to marketing firms (slaughterhouses) selling
certified beef and veal. As a result of that change, the
provisions which must be respected for the derogation
under Article 87(3) (c) of the Treaty to apply are those at
(“Aid for
point 4.2 of
in the processing and marketing of agri-
investment
cultural products”).

the Community guidelines

(40)

(41)

Since only marketing firms are eligible for the aid, the
amount of the aid is fixed at 40% of the eligible expen-
diture with no possibility of modulation. That intensity
complies with the criterion at c).

intended for

scales or
The aid is
equipment which fall within the definition of eligible
expenditure at d).

the purchase of

(37) Under point 4.2 of the Community guidelines, aid for
in the processing and/or marketing sector
the following conditions are

investment
may be authorised if
satisfied:

a)

the beneficiaries must be holdings which have demon-
strated their profitability;

b) these holdings must comply with minimum rules as
regards the environment, hygiene and animal welfare;

c)

the intensity of the aid may not exceed 50 % of the
eligible investment in Objective 1 regions and 40 %
elsewhere;

d) eligible

construction,
includes
expenditure
purchase and improvement of
the
purchase of new machinery and equipment and
general expenditure;

the
real property,

(42) As regards market outlets, in their letter of 25 June 2002
the Italian authorities provided information, the lack of
which had led the Commission to doubt whether the aid
was compatible with the common market. In particular,
since the beneficiaries are economically viable marketing
firms and the proposed investment does not increase
productive capacity, the criterion at e) may be considered
satisfied.

(43) Another point which had led the Commission to initiate
the Treaty is the
proceedings under Article 88(2) of
mechanism for checking on the cumulation of aid,
which appeared inadequate. However,
in their letter of
25 June 2002 the Italian authorities undertook to check
all the applications for aid in liaison with the Region of
doubts which the
Lombardy. This
Commission had had.

removed

the

VI. CONCLUSIONS

e)

there must be normal market outlets for the products
in question.

(44)

(38) As

regards

the criterion of economic viability,

the
conditions of eligibility for the aid, and specifically the
in administration, which have
exclusion of

firms

In the light of the above, the Commission considers that
the aid which the Brescia Chamber of Commerce intends
the
to firms marketing beef and veal
to grant
purchase of scales is compatible with the common
market,
the
Community guidelines for the agricultural sector. The
aid measure may therefore benefit from the derogation
under Article 87(3)(c) of the EC Treaty,

complies with point 4.2 of

since

for

it

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HAS ADOPTED THE FOLLOWING DECISION:

Article 1

The State aid which Italy intends to implement for certain firms marketing beef and veal in the province of
Brescia is compatible with the common market within the meaning of Article 87(3)(c) of the Treaty.

Implementation of this aid is therefore authorised.

This decision is addressed to the Italian Republic.

Article 2

Done in Brussels, 20 April 2004.

For the Commission

Franz FISCHLER
Member of the Commission