2005/239/: Commission Decision of 14 July 2004 concerning certain aid measures applied by France to assist fish farmers and fishermen (notified under document number C(2004) 2588)Text with EEA relevance
Date: 2004-07-14
Institutions: European Commission
Subjects: France, State aid, aquaculture, control of State aid, fishing industry

19.3.2005

EN

Official Journal of the European Union

L 74/49

COMMISSION DECISION

of 14 July 2004

concerning certain aid measures applied by France to assist fish farmers and fishermen

(notified under document number C(2004) 2588)

(Only the French text is authentic)

(Text with EEA relevance)

(2005/239/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

II. DESCRIPTION

(4)

The formal
respect of the following measures:

investigation procedure was

initiated in

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

Having called on interested parties to submit their comments
pursuant to the provision cited above,

departments of

1. exceptional aid for the fishermen and fish farmers of
the
Loire-
Atlantique, Vendée, Charente-Maritime and Gironde
on France’s Atlantic coast (hereinafter referred to as
from Finistère to
the Atlantic coast departments
Gironde).

Finistère, Morbihan,

Whereas:

— exemption from social security contributions for
the first quarter of 2000 (or an average quarter),

I. PROCEDURE

— reduction of financial charges;

the compensation measures

By letter dated 21 June 2000, France informed the
Commission of
it had
adopted for fishermen and fish farmers affected by the
oil pollution caused by the wreck of the Erika in the Bay
of Biscay on 12 December 1999 and the extraordinarily
violent storms of 27 and 28 December 1999. At the
Commission’s request, further information was provided
by letters dated 28 November 2000, 6 April 2001 and
13 August 2001. Because they were implemented before
they were
the Commission could decide whether
compatible with common market rules, these measures
were registered as a non-notified aid scheme, under the
number NN 80/2000.

2. additional measures

to assist

fish farmers

and

fishermen throughout France:

— additional measure reducing social security contri-
butions for all fish farmers (from 15 April to 15
July 2000) and fishermen (from 15 April to 15
October 2000) of mainland France and the
overseas departments,

By letter dated 11 December 2001,
the Commission
notified France of its decision to consider certain of the
planned measures compatible with the common market
and to initiate
investigation procedure
provided for in Article 88(2) of the Treaty in respect
of
the others. France made known its response by
letter dated 5 March 2002.

formal

the

The Commission Decision to initiate the formal investi-
gation procedure was published in the Official Journal of
the European Communities (1). The Commission invited
interested parties
comments. The
Commission received no comments.

to submit

their

(1) OJ C 39, 13.2.2002, p. 6.

the

fish farmers; when the formal

— exemption from State fees for the year 2000 for
investigation
all
procedure was
Commission
opened,
understood that this exemption applied only to
aquaculture undertakings in the Atlantic coast
departments from Finistère to Gironde, but
it
subsequently transpired that the measure was an
additional
to all
producers in mainland France and the overseas
departments.

general measure

applying

(5)

For the record, the Commission would point out that the
measures that had been deemed compatible with the
common market, about which France was informed in
a letter of 11 December 2001, concerned the under-
takings located in the Atlantic coast departments from
Finistère to Gironde, and were the following:

(1)

(2)

(3)

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— for

fish farmers: application of

the agricultural
disasters scheme, aid for rebuilding equipment and
stocks, advances on compensation to be paid by
the International Oil Pollution Compensation Fund
(IOPCF),

— for

aid for

rebuilding

fishermen:

and
equipment lost or damaged in the storm, advances
on compensation to be paid by the IOPCF, flat-rate
aid for
revenue resulting from damage
loss of
suffered during the storm.

vessels

A. Measures for fish farmers in the Atlantic coast
departments from Finistère to Gironde

1. Exemption from social security contributions for the first

quarter of 2000 (or an average quarter)

This measure was aimed at two categories of fish farmers:
those whose stocks and equipment were damaged by the
storm in December 1999 and who received aid for
rebuilding stocks, and those who suffered damage by
from the Erika and received an
pollution from oil
advance on compensation to be paid by the IOPCF.

It was a targeted measure determined by the situation of
the undertakings concerned. It was applied for one, two
or three months, depending on the scale of damage
suffered by the undertakings concerned. During that
period,
totally
exempted from social security charges.

concerned were

undertakings

the

Applications were examined by the compensation units
set up in each of the departments concerned under the
authority of the prefect, with the participation of the
administrations concerned, professional organisations,
banks and insurance companies. The list of beneficiaries
was drawn up by the Directorate for Sea Fishing and Sea-
based Fish Farming at the proposal of the departments’
prefects. It concerned 1 476 undertakings. The total value
of the exemptions was EUR 0.87 million.

financial pressure on undertakings affected by the storm
and/or the oil pollution.

(10) Application files had to be submitted by 1 April 2000.
They were evaluated by the departments’ maritime affairs
directorates and presented to the compensation unit. The
amount of the aid was determined according to criteria
defined locally. The compensation units had to consider
the scale of activity actually lost
in the 1999/2000
winter, the debt situation and vulnerability of the under-
taking, the operating revenue for the last two financial
years, any external revenue to the undertaking over the
same period, and the viability of the undertaking. The
undertakings’ creditors (banks and suppliers) were asked
to make a particular effort. The amount of the aid could
not exceed FRF 48 000 (EUR 7 317), except where the
compensation unit
situation particularly
judged the
critical and raised the ceiling to FRF 62 000 (EUR 9 451).

(11)

(12)

the basis

The individual debt adjustment plans drawn up under
this procedure were
an agreement
approved by all the parties and identifying the contri-
bution of
implementation. The
decision to award the aid was taken by the department
prefect. The total amount of the aid was approximately
FRF 8 million (EUR 1,2 million) for 1 083 undertakings.

each party to its

for

B. Additional measures

In addition to the above measures — both those for
which the formal
investigation procedure was initiated
and those which the Commission has already approved
— the Minister for agriculture, fisheries and aquaculture
these
decided to apply additional measures to assist
to deal
undertakings,
with the difficulties facing the fisheries and aquaculture
sector as a result of the cumulative effects of the storm
and oil pollution, and take account of
the damage
suffered by undertakings in the sector because of the
deterioration of the market.

in order, as France has stated,

2. Reduction of financial charges

1. Exemption of all fish farmers from State fees for the year

individual debt adjustment plans, part of

This measure was applied to the same undertakings as
those referred to in recitals 6 to 8. It consisted in paying,
under
the
interest
falling due in 2000, 2001 and 2002 for
medium and long-term loans and operational consoli-
dation loans. The purpose of these measures stated by
France in its letter of 13 August 2001 was to reduce the

2000

(13) As France stated in its letter of 21 June 2000, i.e. before
the formal
initiated, an
investigation procedure was
exemption from State fees for fish farming concessions
in public sea waters and water intake authorisations to
supply parcels situated on private property was granted
for the year 2000.

(6)

(7)

(8)

(9)

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(14)

in which it gave its
In its letter of 5 March 2002,
the procedure, France
comments on the initiation of
stated that
the additional
relief measures for all fish farmers in mainland France
and the overseas departments.

this measure was part of

(21)

The procedures for the reduction of the contributions
owed to the MSA for fish farmers covered by this
scheme were defined in a circular
issued by the
Ministry of agriculture and fisheries on 25 April 2000.
50 % of the contributions payable by fish farmers and
heads of undertakings were paid for them for three
twelfths of the contributions required for 1999 and for
the contributions due from them for their employees for
the last three months of 1999.

(15)

In response to a request from the Commission, France
confirmed in its letter of 24 September 2002 that this
exemption had been extended to all marine fish farmers
by a decision of 12 September 2000.

(16)

The total value of the exemption was EUR 3,81 million.

2. Reduction of social security contributions for fish farmers

and fishermen

The Minister
for Agriculture and Fisheries decided
(decisions issued in circulars of 15 April 2000 and 13
July 2000) to grant all undertakings in the sector a 50 %
reduction in social security contributions for the period
15 April 2000 to 15 July 2000 for fish farmers and 15
April 2000 to 15 October 2000 for fishermen.

(22)

The total value of these exemptions was FRF 119 million
(EUR 18,2 million).

C. Reasons for initiating the formal

investigation

procedure

(23)

The measures described in sections A and B were
adopted in response to the pollution caused by the
wreck of the petrol tanker Erika on 12 December 1999
and the violent storm of 26 and 27 December 1999.

This reduction applied to employers’ and employees’
contributions
in
mainland France and the overseas departments.

fishermen and fish farmers

for all

(24)

for

applying the

The procedures
reduction varied
according to whether the contributions were paid to
the ENIM (Etablissement National des Invalides de la
Marine) or the MSA (Mutualité Sociale Agricole).

if

it

They were analysed in the light of Article 87(2)(b) of the
Treaty, which states that aid is compatible with the
is granted ‘to make good the
common market
damage caused by natural disasters or exceptional occur-
rences.’ The pollution following the shipwreck of the
Erika can be described as an exceptional occurrence
within the meaning of this Article. Equally, the extreme
and unaccustomed violence of the storm of 26 and 27
December 1999 qualifies it to be described as a natural
disaster.

The rate of reduction of contributions to the ENIM was
50 % for both employees’ and employers’ contributions.
However,
in the case of certain vessels for which the
share payment system is not applied, the part of the
employers’ contributions taken over was increased to
75 %. France explained this different rate by the fact
that
there is a close
financial solidarity between the owners and the crew in
the face of difficulties encountered in the course of
fishing
reduced
turnover, whereas in the case of industrial ship owners
where this type of payment does not exist, the owners
bear the greater part of economic difficulties.

in the case of share payment

particularly

activities,

regards

as

(25)

The Commission’s role in this context is to establish
whether there was over-compensation for the damage
caused by these events.

1. Measures for fish farmers in the Atlantic coast departments

from Finistère to Gironde

(26)

for which the

The measures
investigation
procedure was initiated are the exemption from social
security contributions for the first quarter of 2000 (or
an average quarter), the reduction in financial charges
and the exemption from State fees.

formal

(17)

(18)

(19)

(20)

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(27)

The social security contributions exemption measure was
applied after examination by the compensation unit of
the situation of each undertaking that might qualify for
it. The duration of the exemption was graded, from one
to three months, depending on the damage suffered. This
exemption measure was additional
to other measures
(application of the agricultural disaster scheme, aid for
rebuilding equipment
and stock and advances on
compensation to be paid by the IOPCF). On the basis
of the information provided, the Commission did not feel
able to confirm that this exemption from social security
contributions had not, overall,
involved compensation
over and above the damage suffered.

(28)

The reduction of financial charges was also additional to
the other measures adopted. Here too, the Commission
could not be sure that this measure had not provided
compensation over and above the damage suffered.

(29)

six departments

The exemption from State fees was also additional to the
other measures adopted. Also, according to the infor-
mation available to the Commission, all fish farmers in
the
concerned appeared to have
benefited from this measure. France did not state the
reasons why this measure had been extended to all
those working in the sector
in these departments.
Therefore the Commission again could not be sure
that, overall,
the exemption from State fees had not
provided compensation over and above the damage
suffered.

(30)

Since the Commission could not establish that there had
not been over-compensation for the damage suffered,
these measures could not be declared compatible with
the common market under Article 87(2)(b) of the Treaty.

2. Additional measures reducing social security contributions

for all fish farmers and fishermen

(32) According to France, the additional relief measures for all
fish farmers and fishermen in mainland France and the
overseas departments were adopted to compensate for
the adverse economic impact on the sector of the dete-
rioration of the market caused by the poor image of
fisheries
the
aquaculture
pollution caused by the wreck of the Erika.

following

products

and

F i s h f a r m e r s

(33)

Social security contributions were reduced for the period
15 April to 15 July 2000.

(34) According to France, the deterioration of the market led
to a fall in retail sales (9 % by volume and 5 % by weight)
of shellfish in the first half of 2000. The storm also had a
negative impact on the economic situation of the entire
shellfish industry as Charente-Maritime plays a key role
in the marketing of oysters in France.

(35) However, France gave no information on the link
between the amount of economic damage which it
stated that the oil pollution had caused to all shellfish
producers and the amount represented by the exemption
from social security contributions over the period in
question. The Commission was not
therefore able to
establish that the exemption measure corresponded in
value
suffered and did not over-
compensate.

to the damage

(36)

Since the measure had the characteristics of operating
aid, the Commission found, on the basis of the third
indent of the fourth subparagraph of point 1.2 of the
1997 Guidelines that, on the basis of the information at
its disposal, there were doubts as to the compatibility of
the measure with the common market.

(31) As unnotified aid, these measures were analysed in the
light of the Guidelines on the examination of State aid to
fisheries and aquaculture (1), adopted in 1997 and in
force at the time of the measures (hereinafter the 1997
Guidelines). Since the aid concerned was operating aid,
the Commission applied the third indent of the fourth
subparagraph of point 1.2 of the 1997 Guidelines, which
states as a general principle that operating aid is incom-
patible with the common market. It found that on the
the information available it still had doubts
basis of
about
the measures with the
common market.

the compatibility of

(1) OJ C 100, 27.3.1997, p.12.

F i s h e r m e n

(37)

Social security contributions were reduced for the period
from 15 April to 15 October 2000.

(38) According to France there was a general downturn in the
in
the

market for fisheries products, with a sustained fall
demand because of consumers’ concerns about
health implications of the oil pollution.

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(39)

out

this

being

procedure was
pointed

Various retail sales statistics on fisheries products were
provided by France in justification of this relief measure.
The Commission took note of
information.
However, in its letter informing France that the formal
the
investigation
Commission
information
indicated that during the first quarter of 2000 the
value of auction sales rose by 3 % against the previous
year and market withdrawals were less than 1,5 % of the
quantities landed for all the main species, which was
equivalent to the withdrawal rate in the same period in
1999. Furthermore, the exemption measure was applied
to all French fisheries undertakings, included those estab-
lished in the overseas departments.

initiated,

other

that

(40) Moreover,

the Commission had taken note of

infor-
mation distributed by Agence France-Presse and in the
newspapers according to which the reductions in social
security contributions were intended to compensate the
rise in oil prices which had already been registered for
several months.

(44)

validated
each undertaking
situation of
amounts granted in line with the damage suffered.

and

the

B. Additional measures for all

fish farmers and

fishermen

1. Measures for fish farmers

the

situation of

France found that relief restricted to the fish farmers
storm and the oil pollution was
affected by the
industry
inadequate. The overall
appeared sufficiently worrying to justify intervention for
the industry as a whole. The media impact of the oil
pollution on public opinion damaged the consumer
image of fisheries and aquaculture products, and parti-
cularly farmed shellfish, whatever their origin. A study
carried out
interprofessionnel des
produits de la mer et de l’aquaculture (National Inter-trade
Board for Sea and Fish-Farming Products - Ofimer),
estimated that shellfish farming turnover fell by FRF 51
million (EUR 7,77 million) over a four-month period
from 17 December 1999 to 16 April 2000.

for the Office national

(41)

the deterioration of

In view of all this information, the Commission found
that France had not provided information establishing
that the measure was compensation for the economic
the
impact on undertakings of
market in fisheries and aquaculture products. Since the
measure had the characteristics of operating aid,
the
Commission found, on the basis of the third indent of
the fourth subparagraph of point 1.2 of
the 1997
Guidelines that, on the basis of the information at its
disposal, there were serious doubts as to the compa-
tibility of the measure with the common market.

(45) General measures were adopted to deal with this
situation: a general reduction of social security contri-
butions and exemption from State fees. The aid value
of the social security contribution reductions was EUR
3,35 million. The value of the State fees exemption was
EUR 3,81 million. The total amount was thus less than
the EUR 7,77 million fall in turnover estimated by the
study carried out for Ofimer.

2. Measures for fishermen

III. COMMENTS FROM FRANCE

A. Measures for fish farmers in the Atlantic coast
departments from Finistère to Gironde

(42)

France stated that
the reductions in
the purpose of
financial charges granted under debt adjustment plans
was to help the most vulnerable undertakings to deal
situation associated with the
with an exceptional
to cover losses. Only the
natural disasters, and not
most vulnerable undertakings were eligible for
this
measure.

(46)

(47)

(43)

France stated that the procedure put in place for the
reduction of social security contributions and financial
charges was precisely to avoid over-compensation for
damage suffered. The compensation units set up in the
departments affected evaluated the overall economic

investigation procedure.

France contests the Commission’s grounds for initiating
the formal
the
shock of the Erika oil pollution, and media coverage of
its alleged or suspected consequences badly damaged the
image of fisheries and aquaculture products; not a single
sector or area escaped this effect.

It states that

France further states that the relief period (15 April to 15
October 2000) in fact relates to fishing activity in the
first six months of the year, since social security contri-
butions actually relate to the activity of
the three
previous months. This lag made it possible to take into
consideration the exact activity of fishermen when the
greatest difficulties were experienced,
i.e. over the six
months following the two disasters of December 1999.
France therefore considers that the Commission’s analysis
should not have referred to the Ofimer Flash Eco memo
on the economy of 16 February 2001.

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(48)

(49)

It also considers that the Commission should not have
referred to the Ofimer memo on the economy for
January to April 2000 since it was based on estimates
and a large part of the data for March and April was
estimated. The discrepancies found by the Commission
were not the result of different evaluations but of the
normal statistical gap between raw instantaneous data
and its definitive validation. The Commission should
therefore have confined its analysis to the data in the
memo of 6 April 2001 sent to the Commission by the
France as part of the investigation of this case, this data
being definitive for the period in question.

France also states that Ofimer’s monthly summaries
the quantities landed over the first six
indicate that
months were stable in relation to the same period in
1999, although there were downturns, sometimes large-
scale, over short periods which appear to correspond to
the periods of greatest media coverage. However, during
this period withdrawals increased by 28 % as against
1999, particularly during the first three months of the
year (January: + 92 %, February: + 66 %, March: + 35 %).
For some species the level of withdrawals was extremely
high (Norway lobsters: + 175 %, monkfish: + 161 %,
spider crab: × 5), which is evidence of the psychological
impact of the oil pollution on consumer behaviour.

(50) During the first half of 2000, since the quantities landed
were relatively stable but there was a very substantial
increase in the quantities withdrawn, the quantities sold
decreased. The consumption of fresh fisheries and aqua-
culture products fell by 7 % (6 % for fish, 9 % for shellfish
and 6,5 % for crustaceans, particularly shrimps).

(51)

(52)

Prices fell by 6 % against January 1999 and this decline
persisted for the species essential to undertakings’ equi-
librium. It was found that of the 49 important species
monitored by Ofimer, prices fell for 34 species in January
2000, 26 in February 2000 and 21 in March 2000.
Similarly, a constant decline was recorded for all the
main species fished over the entire period.

fisheries

France further states that consumers could not easily
and aquaculture
distinguish the origin of
products and disaffection with those products was mani-
fested irrespective of the production area. The suspicion
generated by the oil pollution therefore affected products
both from the mainland and from the overseas
to
departments without

differentiation. According

France, the customs data for the overseas departments
shows that their products also suffered the effects of
the oil pollution and there was therefore no reason to
exclude
support provided by the
Government.

them from the

(53)

Lastly, France commented that
the Commission had
given little credit to the press articles submitted for illus-
trative purposes and yet had made much of the views
journalists had garnered at trade fairs. It submitted with
its comments a number of articles and additional
documents showing the media hype that surrounded
this event and the climate of suspicion that gave rise
to consumer disaffection with fisheries and aquaculture
products. It also refuted the Commission’s suggestion in
its letter notifying initiation of the formal investigation
procedure that the reduction in social security contri-
butions was
the
increase in fuel prices, which had already been registered
for several months.

really intended to compensate for

IV. ASSESSMENT

A. Existence of State aid

(54) Article 87(1) of the Treaty stipulates that ‘any aid granted
by a Member State or through State resources in any
form whatsoever 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.’

(55)

(56)

The various measures that are the subject of this Decision
(reductions in social security contributions and financial
charges, exemption from State fees) are measures that
favour undertakings
engaging in a certain activity,
namely aquaculture or fisheries. These undertakings are
relieved of certain charges which they would normally
have to bear.

The measures entailed a loss of State resources, either
directly (reduction in financial charges and exemption
from State fees) or indirectly, since the State had to
compensate the losses borne by the body levying the
social security contributions. These measures therefore
constitute State aid within the meaning of Article 87(1)
of the Treaty.

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(57)

Furthermore, since the products of the beneficiary under-
takings are sold on the Community market, the measures
adopted by France reinforce the position of those under-
takings both on the French market in relation to under-
takings from other Member States wishing to introduce
their own products (fisheries and aquaculture products or
other competing food products) on that market and on
the markets of other Member States in relation to the
undertakings active on those markets (for
the same
products). The measures therefore distort or threaten to
distort competition and may affect trade between the
Member States.

(61) Going by the additional information provided, in the case
of the exemption from social security contributions and
the reduction of financial charges, the procedure set up
by France, with the creation of a compensation unit in
each department concerned, with representatives of the
State services concerned, banking establishments and
professionals,
really was designed to avoid risks of
over-compensation. France points out that investigating
each case individually ensured that the aid was adjusted
to the situation of each undertaking, thereby avoiding
over-compensation.

(58)

Such measures are in principle prohibited under Article
87(1) of
the Treaty. They may only be deemed
compatible with the common market if they qualify for
one of the derogations provided for in the Treaty. The
aid to aquaculture and fisheries undertakings must be
analysed in the light of the 1997 Guidelines, as was
done in the course of the preliminary investigation.

(62)

In view of this information the Commission finds that
France established an appropriate procedure allowing
over-compensation to be avoided. It therefore finds that
the only objective of this aid was indeed to compensate
for damage suffered as a result of the two exceptional
occurrences, the storm of December 1999 and the wreck
of the Erika.

B. Measures for fish farmers in the Atlantic coast
departments from Finistère to Gironde

(59)

(60)

formal

investigation
The Commission initiated the
procedure for certain measures adopted to assist
fish
farmers after the events of December 1999 because it
had not been able to establish that overall, with the
aid measures,
cumulative
including those which it had already approved,
there
had not been over-compensation for
the damage
suffered.

different

effect

the

of

(63)

The exemption from social-security contributions and the
reduction of financial charges must therefore be deemed
compatible with the common market under Article
87(2)(b) of the Treaty.

formal

The
following aid measures:

investigation procedure

(64)

related to the

— exemption from social security contributions during
two, or three

the first quarter of 2000 (for one,
months according to the damage suffered),

— reduction of financial charges for fish farmers directly

affected by the storm or the oil pollution,

— exemption from State fees for the year 2000 for
concessions in the six departments affected by the
events (Atlantic coast departments from Finistère to
Gironde).

France

contrary

informed

procedure.

information at

from payment of

in the departments

The exemption from State fees will be analysed in section
C.1 below, since the measure was applied to all French
fish-farmers,
the
to the
Commission’s disposal prior to initiation of the formal
the
investigation
Commission in its letter of 21 June 2000 that
the
marine aquaculture concessions and the water intake
authorisations
concerned were
exempt
the State fee for the year
2000. Since France made no further mention of this
exemption in its subsequent letters to the Commission,
which described in detail the content of the measures
implemented, the Commission asked France by letter of
21 June 2001 whether the exemption had in fact been
applied, and if so asked France to supply the relevant
In its reply of 13 August 2001 France
information.
the departments of
the fish farmers of
stated that
Finistère, Morbihan, Loire-Atlantique, Vendée, Charente-
Maritime
and Gironde had in fact been granted
exemption from the State fee payable in 2000, without
mentioning that these departments were not the only
ones to which the exemption had been applied. Not
until it responded to the initiation of the formal investi-
gation procedure did France state that the measure was a
general one applying to all French fish farmers, like the
reduction in social security contributions.

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C. Additional measures in favour of all fish farmers
and all fishermen

(70)

1. Fish farmers

(65)

The exemption from State fees for the year 2000 and the
reduction in social security charges from 15 April to 15
July 2000 were applied to all fish farmers of mainland
France and the overseas departments.

The loss of turnover following the deterioration of the
image of shellfish can therefore be estimated as 7,7/281
or 2,7 % of the value of the previous year’s production.
The compensation of a value of EUR 7,16 million would
therefore be 7,16/281 or 2,5 % of turnover.

(66) According to France these measures were introduced to
compensate for the loss of
turnover suffered by the
whole industry throughout the territory as a result of
the deterioration of
farmed
shellfish after the wreck of the Erika. A study carried
out for the Ofimer concluded that, following this event,
turnover had fallen by EUR 7,7 million against
the
previous year.

the consumer

image of

(67)

The exemption from State fees, with a value of EUR 3,81
million, and the reduction in social security charges, with
a value of EUR 3,35 million, would thus partially
compensate for this loss of revenue. The total value of
less
the aid for all France was thus EUR 7,16 million,
than the estimated loss (EUR 7,7 million).

(71)

(72)

(68) On the

the

basis of

information provided

the
Commission does not contest that the farmed shellfish
market suffered temporarily. However, as already noted
in the Commission decision initiating the formal investi-
gation procedure, this market deterioration must be put
in perspective — there was no sudden and extreme
customer disaffection.

The Commission considers that small-scale losses must
be categorised as costs to be borne by undertakings in
their activity. Any economic
the normal course of
to various greater and lesser risks
activity is subject
(price fluctuation of production factors,
fluctuation of
the sales price of production, possible increase in
charges, etc.) resulting from a wide variety of unforeseen
circumstances. It considers that when such risks lead to
small-scale losses they cannot give rise to an entitlement
to compensation because that would mean that traders
could claim compensation whenever they suffered the
impact of any unforeseen event. For example,
in line
with this general approach, the Commission considers
that
losses must exceed a
threshold of 30 % (20 % in less-favoured areas) for aid
to be deemed compatible with the common market
under Article 87(2)(b) of the Treaty.

in the agriculture sector

The social security contribution reduction and State fee
exemption measures, intended to compensate for a loss
of turnover of only 2,7 % cannot therefore in principle be
deemed compatible with the common market under
aid
Article 87(2)(b) of
measures
derogations
provided for
in the 1997 guidelines. They must
therefore in principle be deemed incompatible with the
common market.

the Treaty. Nor do these

to any of

correspond

the

(69)

The Commission notes that in 1999 the value of aqua-
culture products (shellfish and fish)
for the whole of
France was EUR 502 million (2000 Ofimer report).
The table giving this
indicate the
relative
fish and shellfish. According to
another source (‘aquaculture’ page of the website of the
Ministry of Agriculture ( (1)), the value of farmed fish
products (sea farming and freshwater farming) was EUR
221 million. This would make the estimated value of
shellfish farming EUR 281 million.

figure does not

shares of

(1) www.agriculture.gouv.fr/pech/aqua/.

(73) However,

that

the Commission notes

the measures
applied to fish farmers in the Atlantic coast departments
from Finistère to Gironde were intended to compensate
for damage directly linked to one of
the events of
December 1999, the wreck of the Erika or the storm.
These aid measures must be evaluated in conjunction
with the other aid measures granted following those
events. The Commission has already pronounced those
the agricultural
other
disasters
rebuilding equipment and
stock, advances on the compensation to be paid by the
IOPCF) compatible with the common market (letter of
11 December 2001), or is pronouncing them so in this
decision (social security contributions relief for the first
quarter of 2000 and reduction of financial charges — see
Section B).

scheme, aid for

(application of

aid measures

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(74)

(75)

an additional

Since these measures have been or are now being
common market
pronounced compatible with the
under Article 87(2)(b),
compensation
worth 2,5 % of turnover must be incorporated in the
total aid received by the fish farmers (the percentage of
2,5 %, corresponding to EUR 7,16 million/EUR 281
million, was calculated for France as a whole; the same
percentage may be taken as the average for each farm).
Given this low relative value and the fact that the other
aid did not fully compensate for the damage suffered, the
risk of over-compensation is avoided.

Losses, and aid allocations to compensate for them,
should have been assessed for each individual aquaculture
holding to establish whether the value of damage suffered
by each undertaking (with the addition of the loss of
turnover resulting from the deterioration in the image
of shellfish, estimated at 2,7 %) was significant. This
was not the method France adopted, since the scheme
applied to all producers in the area concerned (Atlantic
coast departments from Finistère to Gironde). However,
in this case the Commission finds France’s method
acceptable and considers that it was reasonable to use
it to facilitate administration, given the large area and the
number of undertakings affected by the events.

(76)

Therefore the State fee exemption and social security
relief cannot be deemed compatible with the common
market under Article 87(2)(b) of the Treaty when applied
to the aquaculture holdings outside the departments
affected by the events. They can however be deemed
compatible with the common market when applied to
the undertakings in the Atlantic coast departments from
Finistère to Gironde.

(79)

(80)

(81)

2. Fishermen

(77)

The nationwide social security contribution relief applied
to French fisherman was, according to France, intended
to compensate for the depressed market
for fisheries
products. The relief was for the period 15 April to 15
October 2000.

D a t a u s e d b y t h e C o m m i s s i o n

(78)

The Commission was not
convinced by the data
submitted by France, particularly in view of other infor-
mation derived from Ofimer (information on the website

of this public institution (1)), and decided to initiate a
formal investigation procedure.

In a memo of 5 March 2002 responding to the initiation
of the formal investigation procedure, France stated that
the information provided in its memo of 5 April 2001
was the definitive data for the period concerned.
It
considered that the Commission should not have based
its assessment on information found on the Ofimer
website.

The Commission rejects this argument. Ofimer is a public
institution answerable to the Ministry of Agriculture and
Fisheries, and one of its functions is, as the notice on its
website states, the daily monitoring of developments on
the fisheries and aquaculture market. For this purpose it
has an economic observatory. The fish-auction network
gathers sales data from all the French auctions in order to
pass it on in summary form to the industry’s operators. It
was in just such summary data that the Commission was
interested, since they allowed the partial data provided by
France to be placed in their general context
for the
purposes of analysing the aid scheme.

the

this

that

The Commission cannot accept
the Ofimer data
differs significantly from the definitive data established
some time later. The methodology used by the Ofimer
information is
economic observatory to gather
described in the institution’s annual reports (2). On the
fish-auction network’s
basis of
contributions,
Ofimer sends local operators (auctions, producers’ orga-
nisations, wholesale traders) a daily memo and a weekly
memo publishing quantity and price data for the main
auctions and the most representative species of French
supply. In addition, at the beginning of each month an
‘advance’ memo gives the accumulated sales data from
the beginning of the year for the most representative
auctions and the main species and at the end of each
quarter a summary memo on sales is drawn up and
made available on the institution’s website. The method
of collecting this information shows that Ofimer data is
reliable. There is no concrete evidence that this data is
found
misleading. Furthermore,
nothing in the documents
it has consulted on the
website to correct or contradict the data it has used.
Had it done so it would naturally have taken this into
account. Further more by making this data available to
the public on its website, Ofimer gives the data official
status. There is no reason to doubt its credibility.

the Commission has

(1) www.ofimer.fr
(2) Annual Report for 2000, p. 39; Annual Report for 2001, p. 42.

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Official Journal of the European Union

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(82)

The information that France officially submitted, before
the investigation procedure was initiated and in its memo
of 5 March responding to the initiation of the procedure,
was too partial and incomplete for the Commission to
for fisheries
correctly assess the state of
products over
It had to find
the period concerned.
other information in order to carry out its assessment.
The Commission regrets that France did not send this
data, or official data of
to the
Commission directly.

same kind,

the market

the

(83)

The available data should therefore be analysed to
determine the exact situation of the market in fisheries
products during the first half of 2000.

(84)

S u p p l i e s

It only said that

The memo from France of 6 April 2001 did not contain
‘the quantities
figures on supplies.
actually sold and the value of those qualities were in
reality lower than the data held by the Commission
(indicate) and lower than in 1999.’ On that date the
Commission was already familiar with the data in the
memo on the economy for
January to April 2000
examined by the management board of Ofimer at its
meeting of 24 May 2000, and it referred to this data
in its request to France for additional information of 15
January 2001 (quoting an extract stating that ‘the quan-
tities landed during the first four months of 2000 are
stable compared to the same period in 1999 and the
value of auction sales has increased by 3 % compared
to last year.’)

(85)

The memo from France of 5 March 2002, on the other
hand, says that ‘for all the main French auctions, … the
quantities landed in the first six months of 2000 were
stable compared to the same period in 1999, although
there were downturns, sometimes major ones, over short
periods, apparently corresponding to the greatest media
activity.’ This corresponds to what is said in the memo
on the economy referred to and to Ofimer’s Flash Eco of
16 February 2001, to which the Commission referred in

its decision initiating the procedure (this document
provides important
information comparing production
in 2000 with that in 1999 and stating that ‘the results
for 2000 show sales and volume stability compared with
1999.’).

(86)

result of other

The Commission therefore notes that supplies remained
stable in 2000, and in particular during the first six
months. There is no information to indicate that there
was a downturn in supplies when media coverage was
intense. The downturns in supplies were more
most
probably the
factors, mainly bad
weather. It is not rare for a large proportion of fishing
vessels to be unable to go to sea over relatively long
periods (one to two weeks or more) in cases of persistent
bad weather. The media influence cited does not have a
impact on supplies — it does not prevent
direct
fishermen from going to sea.
Its impact is, rather, to
be observed at the next stage, on prices and quantities
withdrawn from the market.

Q u a n t i t i e s w i t h d r a w n

(87) According to the French memo of 6 April 2001,

‘the
withdrawal rate was much higher in the early part of
2000 than in the same period of
the previous year:
there was a rise of 25 % between January to April
1999 and January to April 2000, 35 % between
January to March 1999 and January to March 2000,
92 % between January 1999 and January 2000 and
57 % between February 1999 and February 2000.’ The
memo of 5 March 2002 also quotes these figures, adding
that for the period January to May withdrawals rose by
32 % and for the period January to June by 28 %. It went
‘the level of withdrawals showed some very sharp
on:
peaks
(175 %),
monkfish (161 %) and spider crab (X 5) whose sensitivity
to residual hydrocarbons (1) was highly publicised.’

such as Norway lobster

species

for

(1) The French authorities sent 14 copies of the results of analyses
designed to determine hydrocarbon concentrations in the products
tested (various fish). The Commission was surprised to find that the
test results were obtained from fish samples taken, in the case of
three tests, on 22 February 2000 and received by the laboratory on
23 February 2000,
in the case of another two tests, taken on 7
March 2000 and received by the laboratory on 10 March, and in the
nine remaining cases taken and tested in September and October
2000. These tests showing the presence of hydrocarbons in the flesh
do not prove that they came from the Erika, given the amount of
time that had elapsed. To prove cause and effect between the Erika’s
oil and hydrocarbon contamination, tests should have been carried
out closer to the date of the wreck. The lack of such tests would lead
to the conclusion that there was not any real organoleptic conta-
mination immediately after the event. The presence of hydrocarbons
three or nine months later may in some cases – those of February
and March for example, be just as easily attributable, not to the
Erika, but to the residues from the cleaning of tanks that ships
often carry out in the open sea in breach of the rules. This alter-
native possibility is all the more probable for the samples taken in
September and October.

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Official Journal of the European Union

L 74/59

(88)

if

the

This data is incomplete and does not give a full picture
of withdrawals. The quantities actually withdrawn are not
given, so a doubling or tripling of the quantity would be
insignificant
reference quantity, namely the
quantity withdrawn in the first year, was very small.
Nor are there any figures for the quantities withdrawn
from the market as a proportion of the quantities landed.
Nor is it explained whether the increased withdrawals in
January were of species whose sensitivity to hydro-
carbons received the greatest publicity. The Commission
will analyse the arguments concerning three species cited
by France: Norway lobster, monkfish and spider crab.

(91)

(92)

in which they are harder

(89) A study carried out by Ofimer on Norway lobster (1)
reports that the peak production season for this species
is from mid-April to August. Sizeable withdrawals may
be seasonally determined. The study cites the case of
abnormally high withdrawals in May and June 2001 as
a result of large-scale supplies of live Norway lobster at a
time of year
to sell.
Furthermore, according to information received by the
Commission in the course of administering the rules
governing common organisation of
in
fishery products (Council Regulation (EEC) No 3759/92
of 17 December 1992 on the common organisation of
the market in fishery and aquaculture products and the
implementing Regulations (2) applicable on the date of
the events in question), these withdrawals for the first
half of 2000 stood at 21 kg in January, 5 kg in
February, 2 kg in March, 103 kg in April, 1 364 kg in
May and 2 007 kg in June. So there is no conclusive data
to show that the publicity surrounding the oil spill —
which one supposes would be at its greatest in the weeks
immediately after the accident — led to a significant
increase in the quantity of Norway lobster withdrawn
from the market.

the market

1999, and at 39 kg in March 2000 against 148 kg in
March 1999; withdrawals in the following three months
were again below 1999 levels (241 kg against 278 kg).
The Commission cannot conclude from this conflicting
led to an increase in with-
evidence that the oil spill
drawals.

look at

The Commission has no data concerning the quantities
the third species cited by
withdrawn of spider crab,
France (3). We can, however,
the quantities
notified to the Commission for crabs of
the species
Cancer pagurus, which are distributed and marketed in
a similar way. The quantities withdrawn rose in the first
in absolute
months of 2000 in relation to 1999, but,
terms, the quantities were small: a rise from 19 to 47 kg
in January, 3 to 35 kg in February, 7 to 31 kg in March,
none in April, and then from 31 to 164 kg in May and
from 501 to 521 kg in June. So consumers did not shun
the Cancer pagurus crab in the early months of 2000,
and nothing indicates that things were any different for
the spider crab over the same period.

Therefore, although withdrawals in January 2000 rose by
92 % compared with January 1999 and rose by 28 %
over the first half of that year, these withdrawals were
not large in absolute terms. Nor is there any evidence to
link this increase to the media coverage of the oil spill.
the figures available to the Commission
Furthermore,
show that
the large withdrawals recorded in January
2000 were of species such as spotted dogfish (from
11 423 to 16 362 kg), saithe (from 120 to 3 727 kg)
and plaice (from 51 to 1 789 kg), species for which,
given the way they are marketed, there is little or no
link between increased withdrawals and the media
the oil spill. And, according to Ofimer’s
coverage of
January-April 2000, withdrawals
sectoral
remained below 1,5 % of the quantities landed of the
main species;
individual withdrawals were reported for
sea bass, anchovy and spider crab.

report

for

(90) According to the figures in the Commission’s possession,
454 kg of monkfish were withdrawn from sale in
January 2000 against 84 kg in January 1999, which is
a marked increase. However, withdrawals in February
2000 stood at only 59 kg against 221 kg in February

(1) ‘The Norway lobster market’ presented to the Ofimer board on 6

March 2002.

(2) OJ L 388, 31.12.1992, p. 1. According to Commission Regulation
(EEC) No 2210/93 of 26 July 1993 on the communication of
information for the purposes of the common organisation of the
market in fishery and aquaculture products (OJ L 197, 6.8.1993),
the Member States have to notify the Commission every six months
of the quantities of fishery products listed in Annex 1 A, D and E to
Regulation (EC) No 3759/92 that are withdrawn or unsold. Norway
lobster and monkfish are on this list.

(93)

To sum up,
evidence
coverage of the oil spill.

the Commission finds that
to link increased withdrawals

there is no
to media

(3) The spider crab is one of the species referred to in Article 1 of
Regulation (EC) No 3759/92 but is not listed in Annex 1 A, D or
E. If a withdrawal price is set by the producers’ organisation for such
a species they are not obliged to send the withdrawal figures to the
Commission.

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(94)

Q u a n t i t i e s s o l d a n d p r i c e s

It also states

that, of 49 major

In its memo of 6 April 2001 France reported that retail
sales of fishery products were down 2 % in volume over
the first half compared with the previous year, with fresh
products particularly affected, down 7 % in volume and
1 % in value, breaking down into a 6 % volume drop for
shellfish and 6 % for fish (5 % for fish pieces and 7 % for
whole fish). The memo of 5 March 2002 cites these
figures (with a minor correction to 6,5 % for shellfish)
as evidence that consumers were boycotting fishery
products.
species
monitored by OFIMER, prices had fallen for 34 in
January, 26 in January-February, 21 in January-March
and 18 in January-June. Average price falls for some of
these species were: sole (– 5 %), sea bass (– 6 %), hake
(– 6 %), anchovy (– 6 %), squid (– 11 %), saithe (– 8 %),
sardine (– 6 %),
(– 18 %),
plaice (– 28 %), black scabbard-fish (– 20 %), black sea
bream (– 11 %), red gurnard (– 4 %), octopus (– 23 %),
spider crab (– 16 %), pink shrimp (– 20 %). According to
France, ‘all this data is quantifiable evidence of the slump
in the market between January and June 2000 and
if proof were needed, the impact the wreck of
shows,
the Erika had on consumers’ behaviour.’

John Dory (– 11 %), mackerel

(95)

The Commission notes that this data is not really quan-
tifiable evidence of what happened. To give a true picture
of
the
the situation France should also have sent
Commission figures for the quantities marketed of each
of the species in question, something it did not do.

(96)

The Commission points out that price trends were incon-
sistent according to Ofimer’s sectoral report for January
to April 2000. Some prices fell as a result of plentiful
supply (sea bass down 11 %, saithe down 8 % and hake
down 9 %) whereas limited supplies led to price hikes for
other species: red mullet (31 %), cod (27 %) and monkfish
(13 %). This sectoral report also shows a change in the
structure of
(hake,
supply, with expensive
monkfish, sole, sea bass, red mullet, Norway lobster)
gaining market share from cheaper species (mackerel,
saithe, whiting, cuttlefish, anchovies) and leading to a
3 % increase in the value of auction sales on the
previous year.

species

(97)

The value of auction sales minus sales costs represents
vessels’ turnover. The Commission therefore observes a
slight increase in the overall turnover of fishing busi-

nesses. Accordingly, though prices for many species did
fall, this fall did not reflect a decline in prices across the
board but the contrasting situation described by Ofimer
in its sectoral report. Though the oil spill may well have
affected the market for fishery products, e.g. for certain
specific species, evidence from a number of sources
suggests that the impact was very marginal. Furthermore,
if it had been significant, Ofimer would definitely have
mentioned it in the various public documents it drew up.

C o n c l u s i o n

(98) On the basis of the evidence, the Commission believes
that the nationwide reduction of social security contri-
butions granted to fishermen for the period 15 April to
15 October cannot be considered compatible with the
common market under Article 87(2)(b) of the Treaty.

(99) As operating aid granted to all fishing businesses without
any obligation on the part of the recipients, this aid is
incompatible with the common market by virtue of the
third indent of the fourth paragraph of section 1.2 of the
1997 Guidelines.

V. CONCLUSIONS

(100) The Commission finds that France has unlawfully imple-
mented the aid in question contrary to Article 88(3) of
the Treaty.

(101) On the basis of the arguments set out in sections IV-B
and IV-C.1 of this Decision, the Commission believes
that the aid given to fish farmers in the departments
concerned (reduction of
security contributions
and of financial charges and exemption from State fees)
is compatible with the common market under Article
87(2)(b) of the Treaty.

social

this Decision,

the Commission believes

(102) On the basis of the arguments set out in section IV-C.1
of
the
reduction of social security contributions for aquaculture
producers for the period 15 April to 15 July 2000 and
the exemption from State fees for the year 2000 granted
to fish farmers in other departments are not eligible for
the derogation provided for in Article 87(2)(b) of the
Treaty.

that

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L 74/61

this Decision,

(103) On the basis of the arguments set out in section IV-C.2
of
the
reduction of social security contributions granted to
fishermen for the period from 15 April to 15 October
2000 is not eligible for the derogation provided for in
Article 87(2)(b) of the Treaty,

the Commission believes

that

HAS ADOPTED THIS DECISION:

Article 1

The reduction of social security contributions, reduction of
financial charges and exemption from State fees granted by
in the departments of Finistère,
France
Morbihan, Loire-Atlantique, Vendée, Charente-Maritime and
Gironde are compatible with the common market.

to fish farmers

Article 2

The aid granted by France to fish farmers of departments other
than Finistère, Morbihan, Loire-Atlantique, Vendée, Charente-
Maritime and Gironde in the form of a reduction of social
to 15 July
security contributions for the period 15 April
2000 and exemption from State fees for the year 2000 is
incompatible with the common market.

Article 4

1.
France shall take all necessary measures to recover from
the beneficiaries the aid referred to in Articles 2 and 3 and
unlawfully made available to the beneficiaries.

Recovery

shall be

effected without delay

2.
and in
accordance with the procedures of national law provided that
they allow the immediate and effective execution of
the
include interest from
Decision. The aid to be recovered shall
the date on which it was at the disposal of the beneficiaries
until the date of
interest shall be
its recovery. The rate of
calculated and applied in accordance with Chapter V of
Commission Regulation (EC) No 794/2004 (1).

Article 5

inform the Commission, within two months of
France shall
notification of this decision, of the measures taken to comply
with it.

Article 6

This Decision is addressed to the French Republic.

Article 3

Done at Brussels, 14 July 2004.

The aid granted by France to fishermen in the form of a
reduction of social security contributions for the period 15
April to 15 October 2000 is incompatible with the common
market.

For the Commission

Franz FISCHLER
Member of the Commission

(1) OJ L 140, 30.4.2004, p. 1.