2007/613/EC: Commission Decision of 10 May 2007 on the State aid C 1/06 (ex NN 103/05) implemented by Spain for Chupa Chups (notified under document number C(2007) 1710) (Text with EEA relevance )
Date: 2007-05-10
Institutions: European Commission
Subjects: Spain, State aid, aid for restructuring, aid to undertakings, confectionery product, control of State aid

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(Acts adopted under the EC Treaty/Euratom Treaty whose publication is not obligatory)

II

DECISIONS

COMMISSION

COMMISSION DECISION

of 10 May 2007

on the State aid C 1/06 (ex NN 103/05) implemented by Spain for Chupa Chups

(notified under document number C(2007) 1710)

(Only the Spanish version is authentic)

(Text with EEA relevance)

(2007/613/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

had doubts about the compatibility with the common
market of various measures granted by public bodies to
Chupa Chups.

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 (1) and having regard to
their comments,

Whereas:

I. PROCEDURE

(1)

By letter registered on 22 April 2005, the Commission
received a complaint from a competitor about an alleged
aid measure
in favour of Chupa Chups SA. The
Commission requested information by letters dated 10
June 2005 and 7 September 2005,
to which Spain
replied by letters registered on 11 August 2005, 26
October 2005, 18 November 2005 and 12 December
2005.

(3)

(4)

Spain submitted comments by letter of 2 March 2006.
The Commission requested information from the Spanish
authorities on 25 April 2006, 6 July 2006 and 24
November 2006. These authorities replied by letters
registered on 22 May 2006, 5 September 2006, 7
September 2006, 20 October 2006, 1 February 2007,
6 February 2007 and 12 March 2007.

The Commission Decision to initiate the procedure was
published in the Official Journal of the European Commu-
nities (2), with an invitation to interested parties to submit
their comments on the aid. The Commission received
comments from Chupa Chups, registered on 30 May
2006, and from Inmobiliaria Casa Batlló, registered on
8 August 2006. These comments were forwarded to the
Spanish authorities on 28 September 2006. Spain did
not react to them.

(2)

The Commission decided on 25 January 2006 to initiate
proceedings pursuant to Article 88(2) of the Treaty as it

(5)

No other observation from third parties was received.
The complainant did not intervene.

(1) OJ C 97, 25.4.2006, p. 2.

(2) See footnote 1.

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II. DESCRIPTION OF THE BENEFICIARY AND AID
MEASURES

Chupa Chups is the holding company of an industrial
Its main activity
group established in Spain in 1940.
consists in the production and commercialisation of
candies, notably lollypops. Currently the group operates
four production centres, located in Russia, Mexico, Sant
and Villamayor
Esteve
then a
In June 2006 Chupa Chups, until
(Asturias).
group of
family-owned companies, was sold to the
Italian–Dutch candies corporation Perfetti Van Melle (3).

(Barcelona)

Sesrovires

de

Since 2002 the Chupa Chups group has undergone
considerable
financial difficulties, with consolidated
losses of EUR 22 500 000 in 2002, EUR 4 720 000 in
2003 and EUR 5 950 000 in 2004, and a decreasing
turnover (4). Under those circumstances, the management
launched a restructuring plan in 2002. To restore the
financial situation of the company:

— in July 2002, a syndicated loan of a maximum of
EUR 75 million was granted to Chupa Chups by a
group of private banks. The contract stipulated a
number of obligations for the company,
including
compliance with certain financial ratios. The loan
was guaranteed by several companies belonging to
the group (5). In 2005 the banks offered to Chupa
Chups to renew the financing, but
the offer was
eventually declined,

— in March 2003, Chupa Chups’ owners injected in the
capital of the company extra funds amounting to
EUR 8 million,

— a reshuffling of the corporate structure enabled the
amount of

additional

to the

funds

raising of
EUR 6 790 000 (6).

In the context of
restructuring, on 5
September 2003 the Instituto Catalán de Finanzas (ICF,

financial

that

(6)

(7)

(8)

financial agency of the Catalonian regional government)
granted to Inmobiliaria Casa Batlló, SL (ICB), a subsidiary
of Chupa Chups, a credit of EUR 35 million. The credit
was secured by means of a mortgage on a real estate
property owned by ICB (7), whose value had been
estimated by an independent expert at EUR 71 million.
This credit (Measure 1), which was immediately ‘passed
on’ from ICB to Chupa Chups by means of a subor-
dinated loan (8),
is at the origin of the complaint that
triggered the Commission investigation. Chupa Chups
used these funds to cancel part of the 2002 syndicated
loan (EUR 20 million) and to cover other treasury needs.

(9)

The Commission’s preliminary investigation subsequently
revealed a number of additional measures in favour of
Chupa Chups, namely:

— subsidy of EUR 1 580 000 from the Spanish
in support of
(1989-1994)

‘Ministerio de Agricultura y Pesca’
investments
(Measure 2),

in the Barcelona plant

— subsidy of EUR 4 330 000 from ‘other public bodies’
supporting the building of the Asturias plant (1994-
1997) (Measure 3),

— subsidy of EUR 6 710 000 from ‘different public
the same Asturias

bodies’
for the enlargement of
plant (1999-2003) (Measure 4),

— interest-free credit of EUR 2 800 000 granted by the
Spanish ‘Ministerio de Ciencia y Tecnología’ in 2004
(Measure 5),

(3) Perfetti Van Melle results from the merger in 2001 between the
Italian Perfetti and the Dutch Van Melle. The group is present in
130 countries, had a turnover in 2006 of approximately EUR 1,5
billion and employs 12 000 people.

(4) EUR 344 million in 2002; EUR 294 million in 2003; EUR 261

million in 2004.

(5) This loan was granted under market conditions and is not under

examination in the present procedure.

(6) Several operations between June and December 2004,

including
splitting of real state activities, and incorporation of the property
of the brands through a capital increase.

— additional non-specified subsidies for EUR 1 540 000

(2004) (Measure 6),

(7) ‘Casa Batlló’

is an emblematic Gaudí building in downtown
Barcelona, declared ‘Monumento Histórico-Artístico de
Interés
Nacional’ by Spain. The mortgage on Casa Batlló for the ICF
credit is a first rank one.

(8) The loan of ICF to ICB was granted at six months Euribor + 1 %.
The subordinated loan from ICB to Chupa Chups added an addi-
tional 0,125 % margin to this interest rate.

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— out of

the EUR 11 150 000 aggregate value of
Measures 3 and 4, about EUR 5 million still
remained to be received by Chupa Chups at
the
end of 2004.
In 2005 a private bank granted a
loan of EUR 4 480 000 to Chupa Chups. The loan
benefited from an endorsement by the Asturias
regional
to whom Chupa Chups
offered by way of security the EUR 4 480 000 in
subsidies it was to receive, and a bank deposit of
EUR 300 000 (Measure 7),

government,

financing with conditions comparable to those of the
ICF, nor what were the conditions attached to the
syndicated loan of 30 July 2002.

(11) As regards Measures 2 to 8 above, the opening decision
referred to the fact that the Spanish authorities had not
provided any response to the Commission’s request for
information on the nature and justification of
those
measures.

— in February 2004, the Spanish tax agency authorised
Chupa Chups to split the payment of its debts for
VAT and corporate
tax into quarterly
income
instalments
expiring on 20 February 2008. As
guarantee for this deferral, a new mortgage was estab-
lished on Casa Batlló (Measure 8).

(12)

III. REASONS FOR INITIATING THE PROCEDURE

(10)

In its decision of 25 January 2005 to initiate the formal
investigation procedure
the
Commission expressed its concerns that Chupa Chups
had been advantaged by the
financing from ICF
(Measure 1 above), since:

(the opening decision),

— the credit to ICB did not include any of the restrictive
conditions attached to the syndicated loan agreed
between Chupa Chups and the private banks one
year earlier,

— the conditions agreed with ICF were probably better
for the group than those of the 2002 syndicated
loan, since the ICF loan was immediately allocated
to the partial cancellation of the syndicated loan,

— the interest rate attached to the ICF credit seemed to
correspond to the market rate applicable to healthy
companies, whereas at the time Chupa Chups was
already a ‘firm in difficulty’ within the meaning of
the Rescue and Restructuring guidelines (9),

IV. OBSERVATIONS FROM SPAIN

Measure 1

Spain contested the initial assessment of the Commission
that the ICF credit provides an advantage to the Chupa
In
Chups group, and therefore constitutes State aid.
the
particular,
following arguments:

authorities

advanced

Spanish

the

— the 2002 syndicated loan was contracted between
Chupa Chups
and a group of private banks,
whereas the ICF credit was granted to a Chupa
Chups subsidiary, ICB, which was soon to become
from the group (10). Therefore,
fully independent
creditors and borrowers were different in the two
operations,

— securities were also substantially different. The 2002
syndicated loan to Chupa Chups did not offer any
real estate as security. In particular, the company was
not in a position to offer the first ranking mortgage
in question, since the real estate was owned by
ICB (11).
Instead, Chupa Chups secured its loan by
committing itself to a number of behavioural obli-
gations and to compliance with certain financial
ratios,

— the interest rate of

commitments. Because of

the syndicated loan to Chupa
Chups was also made dependent on the respect of
company’s
those
performance since 2004, this has eventually resulted
in rates that are the same, or even lower, than those
applied by ICF to ICB,

the

— the Spanish authorities did not explain why no
provide

showed willingness

private

bank

to

(9) In particular, the 2004 annual accounts show accumulated losses
from previous years of EUR 38 420 000, corresponding to 360 %
of the subscribed capital at the end of that year (EUR 10 660 000).
The negative results for 2004 amount to an additional 55,8 % of
that capital.

(10) The Spanish tax authorities had received a request for approval of
the corporate restructuring seven months before the granting of the
ICF credit. They green-lighted the operation in March 2004, i.e. 14
months after the request and seven months after the concession of
the ICF credit.

(11) Before the corporate restructuring, Chupa Chups held 94 % of ICB’s
shares. The remaining 6 % was held by a holding company fully
owned by the common shareholders of Chupa Chups and ICB.

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— ICB is not a firm in difficulties but a healthy real
estate company with enough income to honour its
refunding obligations. Furthermore, it provided secu-
rities that were more than sufficient to guarantee the
ICF credit. Consequently, that credit took place under
normal mortgage-market conditions (where interest
rates are usually below rates applied to other types
of loans (12) and did not require any risk premium,
nor the restrictive behavioural clauses contained in
the syndicated loan of Chupa Chups. The same
credit could have been contracted with any private
bank under equivalent conditions,

— in conclusion, the market economy investor principle
applies to the main credit between ICF and ICB,
whereas the subordinated loan between ICB and
Chupa Chups is, in substance, a financial operation
between two private parties (and therefore irrelevant
in terms of State aid control).

Measure 2

Measure 3

(14) According to the information submitted by the Spanish

authorities, Measure 3 can be split into:

— EUR 3 600 000 in aid granted before 1995,

for

SMEs (13)

— EUR 730 000 in aid, corresponding to an aid
intensity of 13 %, granted on 14 March 1997 by
the Asturias
regional government under Decree
7/96 of 15 February establishing various support
(Decree 7/96). The
programmes
Spanish authorities believe that this aid has to be
regarded as an extension of scheme N 448/94 in
support to SMEs in Asturias (exceptionally applicable
to large companies contributing to regional devel-
opment) (14). The measure constituted a complement
to regional aid granted in 1994 by Spain under Law
incentives to
50/85 of 27 December on regional
remedy inter-regional economic imbalances
(LIR),
approved by the Commission (15).

(13) According to the information submitted by the Spanish
authorities, Measure 2 was granted between 1989 and
1994, i.e. more than 10 years before the earliest action
from the Commission in the present case, which was a
request for information dated May 2005.

Measure 4

(15) According to the information submitted by the Spanish
authorities, Measure 4 can be split into the following
items:

Year

Public body granting the aid

National legal basis

2000

Ministry of Economy and Finance

LIR

Subsidy
(EUR
millions)

2,55

Ministry of Industry, Tourism and
Trade

Order of 6 March 1998 (Minería 1) (1)

1,98

1999

2003

Ministry of Industry, Tourism and
Trade

Order of 17 December 2001
(Minería 2) (2)

2000

Asturias regional government

Decree 41/2000 (3)

2002

Asturias regional government

Decree 41/2000

Aid
intensity

13 %

14 %

0,8

12 %

0,69

0,69

13 %

9 %

(1) Orden de 6 de Marzo 1998, modificada por la Orden de 6 de abril 1999, por la que se establecen las bases reguladoras para la concesión
de ayudas dirigidas a proyectos empresariales generadores de empleo, que promuevan el desarrollo alternativo de las zonas mineras.
(2) Orden de 17 de diciembre de 2001 por la que se establecen las bases reguladoras para la concesión de ayudas dirigidas a proyectos
empresariales generadores de empleo, que promuevan el desarrollo alternativo de las zonas mineras. The ‘Minería 2’ programme was
approved by the Commission on 27 November 2001 (letter C(2011) 3628).

(3) Decreto 41/2000 de 11 de mayo por el que se establecen diversos programas de ayuda a las empresas. Scheme approved by

Commission Decision of 30 May 2000 (OJ C 293, 14.10.2000, p. 7).

(12) The interest rate of

the ICF credit was relatively high for the
mortgage market, with rates not rarely in the area of Euribor
+ 0,5 %.

(13) BOPA, 19.7.1996, p. 7714.
(14) Commission Decision of 9 February 1995 (SG/01388/1994).
(15) This Law was developed by Real Decreto 1535/87, de 11 de
reglamento de desarrollo de la Ley
diciembre, por el que aprueba el
50/85 de
regionales para la corrección de desequilibrios
incentivos
económicos interterritoriales. The LIR scheme was approved by the
Commission by letter of 1 September 1987 (SG(87) D/10875).

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Measure 5

V. OBSERVATIONS FROM THIRD PARTIES

(16) According to the information submitted by the Spanish
authorities, Measure 5 was granted under the existing aid
‘Actividades del Centro para
el Desarrollo
scheme
Industrial — CDTI — Desarrollo Tecnológico’ (16).

(21)

Measure 6

(17) According to the Spanish authorities, Measure 6 concerns
a subsidy of EUR 1 590 000 from the European Agri-
cultural Guidance
(EAGGF)
concerning refunds on export to third countries.

and Guarantee

Fund

submission from Chupa Chups

advanced by the Spanish authorities

repeated the
The
arguments
as
regards the lack of State aid in the ICF credit. It also
provided detailed data, along the same lines already
submitted by Spain, on the other measures included in
the opening decision. Chupa Chups also claimed that in
addition to the EAGGF refunds, Measure 6 included a
Instituto de
subsidy of EUR 100 000 from the
Comercio Exterior
(ICEX), granted in 2003 in the
framework of a programme under Commission Regu-
lation (EC) No 1159/2000 (18) of 30 May 2000 on infor-
mation and publicity measures to be carried out by the
Member States concerning assistance from the Structural
Funds.

Measure 7

(22)

(18)

the

The Spanish authorities maintained that
credit
operation endorsed by the Asturias regional government
consisted in advancing to Chupa Chups the amounts
corresponding to pending subsidies to which it was
already entitled. Those subsidies had been granted for
the enlargement of the Asturias plant, a condition that
the company had already complied with when the credit
was agreed. As security in return for the public endorse-
ment, Chupa Chups pledged to the Asturias government
its rights over the subsidies,
for an amount of EUR
4 480 000.

(19)

The endorsement by the Asturias regional government
was therefore covered by the pledge of claims that
Chupa Chups held vis-à-vis several public authorities.

Measure 8

(20)

The Spanish authorities argued that the rescheduling of
Chupa Chups debts for VAT and corporate income tax
stemmed from the mere application of Spanish taxation
law (17), which defines the criteria for eligibility – in
particular as to the financial situation of the undertaking
and the type of securities to provide – and the interest
rates for arrears (interest rates that were indeed applied to
the company). They therefore consider
the tax
authorities did not enjoy any discretionary power.

that

(16) Letter from Regional Policy DG (dated 8 May 1995, registered
under DG/95104085) informing the Spanish authorities that the
CDTI aid scheme was to be considered an existing aid scheme.
Letter
from Competition DG to Regional Policy DG dated
24 February 1995, registered under D/12874.

(17) Ley General Tributaria 58/2003 and Reglamento General de Recau-

dación.

Inmobiliaria Casa Batlló submitted its annual accounts
for business years 2001 to 2004 and the annual
accounts
estate
real
same period of
company ‘Casa Batlló, SL’, which is linked to it.

the

the

for

VI. ASSESSMENT OF THE AID

1. Existence of State aid

(23) Article 87(1) of the EC Treaty declares aid granted in any
form whatsoever by a Member State or through State
resources which distorts or threatens to distort compe-
tition
the
certain
production of certain goods and affects trade between
Member States to be incompatible with the common
market.

undertakings

favouring

by

or

1.1. Measure 1: ICF credit (2003)

(24) As regards the ICF credit, it must be determined whether
it confers on Chupa Chups a support that the company
to obtain on market
would not have been able
conditions.
the Commission has to
assess whether this public body acted as a hypothetical
market economy investor would have done under similar
circumstances.

In other words,

(25) As set out under Section IV above, further to the opening
decision Spain submitted information showing that the
2002 syndicated loan and the ICF credit cannot be
compared because the borrowers were different in the
two operations, securities were different, ICB was not a
firm in difficulties, and ICB provided a security that was
more than sufficient to guarantee the ICF credit.

(18) OJ L 130, 31.5.2000, p. 30.

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(26) On the basis of the information and arguments provided
by Spain, the Commission considers that it has been
sufficiently proved that
the market economy investor
complied with in the main credit
principle was
the subor-
operation between ICF and ICB, and that
dinated loan between ICB and Chupa Chups
is a
financial operation between two private parties.

(27)

Therefore,
does not involve State aid.

the Commission concludes that Measure 1

1.2. Measures 2 to 5

(28) Measures 2 to 5 were public subsidies directly granted to
Chupa Chups. They involved the allocation of State
resources conferring an advantage on one individual
company. As regards in particular Measure 5, Spain
used State resources by granting an interest-free loan to
the company. The measures have provided Chupa Chups
with advantages vis-à-vis
competitors which distort
competition,
inasmuch as the company has reinforced
its financial position and has increased its investment
capacity. Since Chupa Chups is active in the candies
market, a sector in which trade exists between Member
States, and it is an internationally active company, the
criterion of affecting trade within the Community is also
fulfilled.

(29)

The Commission therefore concludes that Measures 2 to
5 constitute State aid within the meaning of Article 87(1)
EC Treaty. The Spanish authorities do not dispute this
analysis.

1.3. Measure 6:

additional

non-specified

subsidies

for

EUR 1 540 000

(30)

Further to the information received from Spain and
Chupa Chups,
it must be concluded that Measure 6
encompasses the following elements:

exports

refunds

— a subsidy of EUR 1 590 000 from the EAGGF
concerning
third
on
countries (19). The Commission notes that, according
to the case law of the Court of Justice (see paragraph
22 of the judgment of 13 October 1982 in Joined
Cases 213-215/81 Norddeutsches Vieh- und Fleisch-
kontor), export funds granted by the EAGGF under
rules do not
Common Agricultural Policy (CAP)

to

constitute State aid (20). This measure therefore does
not contain State aid elements;

— according to the comments

for

Españolas’

activities
related
the brand ‘Chupa Chups’

from Chupa Chups
received on 30 May 2006, Measure 6 also includes
a subsidy of EUR 100 000 from ICEX granted in
2003 in the framework of the programme ‘Plan de
to the
Marcas
promotion of
in South
Korea. This programme was introduced by ICEX in
2003 and, according to Chupa Chups, the Spanish
authorities considered at the time it was granted that
the subsidy to the company complied with Regu-
lation 1159/2000. Spain has not
rejected the
assertion by Chupa Chups that
this subsidy was
part of the EUR 1 540 000 ‘additional non-specified
subsidies’
the decision
initiating the procedure. Nor has Spain made any
comment on the nature of the subsidy. Specifically,
despite
the
Commission’s enquiries in this regard, Spain has
to the
not claimed that
conditions on de minimis aid applicable at
the
time (21).

identified in point 5(5) of

its granting was subject

low amount

involved

and

the

(31)

Consequently, the Commission concludes that Measure 6
constitutes State aid within the meaning of Article 87(1)
EC Treaty to the amount of EUR 100 000.

1.4. Measure 7:

endorsement

from the Asturias

regional

government (2005)

(32)

the information provided by Spain, as
In view of
described under
the Commission
section IV above,
considers that the endorsement by the Asturias regional
government was guaranteed by the firm credit rights that
Chupa Chups had vis-à-vis several public authorities. The
Commission considers, in particular, that Chupa Chups
was formally entitled to receive the subsidies in question
at the time the credit was agreed, and that, according to
the analysis below (cf. assessment of Measure 4), those
subsidies were all compatible aid with the exception of
EUR 800 000.

(33)

In the light of the above, the Commission concludes that
the Asturias government did not
the intervention of
involve any significant
risk and therefore did not
constitute State aid.

(19) According to Chupa Chups’ submission of 30 May 2006, EAGGF
refunds amounted to EUR 1 440 000. However,
in a document
dated 7 September 2006, Spain showed that EAGGF refunds to
the company totalled EUR 1 590 000 in 2004.

(20) [1982] ECR 3583.
(21) Commission Regulation No 69/2001 of 12 January 2001 on the
application of Articles 87 and 88 of the Treaty to de minimis aid
(OJ L 10, 13.1.2001, p. 30).

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1.5. Measure 8: debt deferral by the tax agency

(34)

The information provided by the Spanish authorities in
reaction to the opening decision shows that:

— the Spanish public administration is bound to follow
the procedures laid down by General Taxation Law
58/2003 and its implementing law. Those procedures
are administrative in nature, and only in some
specific cases, as established in the laws, is the admin-
istration required to undertake court procedures,

(35) On the basis of the above arguments the Commission
considers that Spain has provided sufficient evidence that
the rescheduling of Chupa Chups debts for VAT and
corporate income tax stemmed from the mere appli-
cation of Spanish taxation law, and that the tax autho-
rities did not enjoy any discretionary power as regards
eligibility of the company, securities necessary or interest
rates applied.

(36)

In consideration of this, the Commission concludes that
Measure 8 is of a general nature and does not constitute
State aid.

— the legal figures for the deferment of payments or
payment by instalments are described in Article 65
of Law 58/2003,

2. Compatibility of Measures 2 to 6

— the possibility of requesting a deferment of payments

is open to any taxpayer,

securities

is
cover

— the granting of a deferment
that
the deferral

to the
provision of
amount
deferred, payment of
interest, and a
In the present case,
25 % surcharge on the total.
Chupa Chups provided a mortgage covering EUR
15 240 000, which is
resulted
from those calculations,

subject
the

the amount

that

— Chupa Chups did not benefit from any actual
(Moratoria fiscal), but

‘tax
suspension’
from the
possibility of paying by instalments. Thus, deferred
payments generated interest according to the legal
rates established by the Spanish budgetary laws for
each period. Those rates were similar to market rates
applied to other types of credits,

rather

— Chupa Chups requested deferral of
the period for

its tax debts
before
voluntary payment had
expired. This prevented, according to Article 65 of
Law 58/2003,
an execution
procedure,

initiation of

the

— the deferment agreement established that any credit
position of Chupa Chups vis-à-vis the tax adminis-
tration would be assigned to the cancellation of debts
deferred. Given that Chupa Chups is a frequent
generator of VAT credits on account of
its
exporting activities,
the schedule of amortisation
initially foreseen has been substantially accelerated.

2.1. Measure 2:

subsidy of EUR 1 580 000 from the
in support

Spanish ‘Ministerio de Agricultura y Pesca’
of investments in the Barcelona plant (1989-1994)

(37) According to the information submitted by Spain,
Measure 2 was granted between 1989 and 1994,
i.e.
more than 10 years before the earliest action from the
Commission in the present case, which was a request for
information dated May 2005.

(38)

The Commission therefore concludes that for Measure 2
the limitation period provided for by Article 15 of
Council Regulation No 659/1999 of 22 March 1999
laying down detailed rules for the application of Article
93 of the EC Treaty (22) has expired and the measure
constitutes existing aid.

2.2. Measure 3: subsidy of EUR 4 330 000 from ‘other
the Asturias

public bodies’ supporting the building of
plant (1994-1997)

(39)

The Commission notes that according to the information
provided by Spain, subsidies of EUR 3 600 000 within
Measure 3 were granted before 1995, i.e. more than 10
years before the earliest action from the Commission in
the present case, and therefore the limitation period
provided for by Article 15 of Council Regulation (EC)
No 659/1999 has expired. The subsidies thus constitute
existing aid.

(22) OJ L 83, 27.3.1999, p. 1. Regulation as last amended by Regulation
(EC) No 1791/2006 (OJ L 363, 20.12.2006, p. 1). Article 15 of the
Regulation states: 1. The powers of the Commission to recover aid
shall be subject to a limitation period of 10 years. 2. The limitation
period shall begin on the day on which the unlawful aid is awarded
to the beneficiary either as individual aid or as aid under an aid
scheme. Any action taken by the Commission or by a Member
State, acting at the request of the Commission, with regard to the
unlawful aid shall interrupt the limitation period. Each interruption
shall start time running afresh (…). 3. Any aid with regard to which
the limitation period has expired shall be deemed to be existing aid.

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(40) As regards the EUR 730 000 in aid granted on 14 March
1997 by the Asturias regional government under Decree
7/96, the Spanish authorities claim that this aid should
be regarded as an extension of scheme N 448/94 in
support to SMEs in Asturias (exceptionally applicable to
large companies contributing to regional development),
and that it would constitute a complement to regional
aid granted in 1994 by Spain under Law 50/85 (LIR).
The Commission notes that scheme N 448/94 expired at
the end of 1996 and was not subsequently extended.
Nevertheless, the Commission considers that the comple-
mentary subsidy from the Asturias regional government
can be examined on an ad hoc basis in the light of
Decree 7/96 and the regional aid ceilings for Spain as
laid out in Commission Decision No 463/94 (23). On this
basis, the aid can be declared compatible since:
it
constitutes regional aid,
in so far as it was applied to
investments in fixed assets that were eligible under the
LIR; (ii) the accumulated aid intensity remained below the
50 % ceiling for the Asturias region applicable at the
time.

(i)

(44)

clear that it must not apply to companies in difficulties.
The Commission notes that further to the heavy losses
incurred in 2002 (26)
and its performance during
2003 (27), Chupa Chups had to be regarded as a
company in difficulties (28) at
the time the aid was
granted. Therefore, Chupa Chups was not eligible for
this aid. The Spanish authorities have stated that this
aid has not yet been paid out.

Regarding the two subsidies granted under Decree
41/2000, the Commission notes that the latter decree
in
was approved by decision of 30 May 2000,
2000 and 2002 (when the subsidies were granted)
Chupa Chups was still eligible for regional aid, and
for Asturias were
that
aid ceilings
respected. Therefore,
in question
constitute compatible regional aid.

the two subsidies

regional

that

the

2.3. Measure 4: subsidy of EUR 6 710 000 from ‘different
public bodies’ for the enlargement of the same Asturias
plant (1999-2003)

(41)

The Commission approved the LIR scheme by decision
of 1 September 1987. Therefore, the EUR 2 550 000
subsidy granted to Chupa Chups under this regional
aid scheme constitutes compatible aid.

(42) As regards the EUR 1 980 000 subsidy received by
Chupa Chups in 1999 under ‘Minería 1’, the Commission
notes that
this programme is not an approved aid
scheme. However, after an individual assessment of the
measure, the Commission concludes that the subsidy at
hand constitutes compatible regional aid according to the
1998 Commission’s Guidelines on national regional aid
(1998 RAG) (24).
In particular, Spain has provided
evidence
initial
among those
investment,
considered in the 1998 RAG, that the intensity of the
aid respected the regional ceilings applicable in Asturias
at the time, that accumulation rules were respected, that
at least 25 % of the investment was financed with the
beneficiary’s own resources, and that the investment was
kept more than five years after the date the aid was
granted.

limited to the

costs were

aid was

eligible

that

that

the

(43)

Concerning the EUR 800 000 in regional aid granted in
2003 under ‘Minería 2’,
the Commission notes that
‘Minería 2’
is an approved aid scheme (25). However,
the Commission letter approving the scheme makes

(23) OJ C 25, 31.1.1996, p. 3.
(24) OJ C 74, 10.3.1998, p. 9.
(25) Cf. footnote 17.

(45)

the Commission considers that of

In conclusion,
the
subsidies encompassed by Measure 4, EUR 5 910 000
constitute compatible regional aid and EUR 800 000
constitute incompatible aid. The latter has not yet been
paid out by the Spanish authorities.

2.4. Measure 5:
granted by
Tecnología’ in 2004

interest-free
the Spanish ‘Ministerio de Ciencia

credit of EUR 2 800 000
y

(46)

The Spanish authorities have provided evidence that
Measure 5 was granted under the existing aid scheme
‘Actividades del Centro para el Desarrollo Industrial –
CDTI – Desarrollo Tecnológico’. Therefore, it constitutes
compatible State aid.

2.5. Measure 6: subsidy of EUR 100 000 from ICEX further
to Commission Regulation (EC) No 1159/2000

(47)

for

the

that Regulation 1159/2000
The Commission notes
concerns
to be
information on publicity measures
carried out by the Member States concerning assistance
from the Structural Funds and does not provide any legal
the
granting of
basis
the
aid. Despite
Commission’s request
regard, Spain has not
in that
justified in any other manner the compatibility of this
In particular, Spain has not submitted any
subsidy.
evidence that State aid in the context of
the ICEX
programme ‘Plan de Marcas Españolas’ constitutes an
existing aid scheme.

(26) EUR 22,078 million, corresponding to 86,5 % of

the capital

subscribed at the end of the financial year.
(27) Leading to additional losses of EUR 4,72 million.
(28) Within the meaning of point 5(a) of

the 1999 Community
Guidelines on State aid for rescuing and restructuring firms in
difficulty (OJ C 288, 9.10.1999, p. 2).

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(48)

In the absence of information proving the opposite, the
Commission finds that none of the exceptions laid down
in Article 87(2) and (3) of the Treaty is applicable to the
subsidy, and therefore concludes that the aid has to be
considered incompatible.

Asturias plant, a subsidy of EUR 5 910 000 for the enlargement
of
the same Asturias plant, plus an interest-free credit of
EUR 2 800 000, is compatible with the common market.

VII. CONCLUSION

(49)

The Commission finds that:

(a) Measures 1, 7, 8,

financing of EUR
and the
1 590 000 within Measure 6 do not constitute
State aid;

(b) Measures 2, 3, 5, and EUR 5 910 000 within
Measure 4 can be declared compatible with the
common market;

(c)

the financing of EUR 800 000 in Measure 4 and EUR
100 000 in Measure 6 constitute State aid that
cannot be declared compatible with the common
market under any derogation in the EC Treaty.
the EUR
According to the Spanish authorities,
800 000 in Measure 4 have not been paid out, and
therefore there is only need for recovery of
the
EUR 100 000 in Measure 6,

HAS ADOPTED THIS DECISION:

Article 1

The State aid amounting to EUR 100 000, unlawfully
1.
granted by Spain in breach of Article 88(3) of the Treaty, in
favour of Chupa Chups is incompatible with the common
market.

Out of these amounts, EUR 6 640 000 (corresponding to EUR
730 000 supporting the building of the Asturias plant plus EUR
5 910 000 for the enlargement of that plant), and the interest-
free credit of EUR 2 800 000 are compatible with the common
market pursuant to Article 87(3)(c) of the Treaty, whereas EUR
5 180 000 (corresponding to a EUR 1 580 000 subsidy in
support of
in the Barcelona plant plus EUR
3 600 000 supporting the building of the Asturias plant) are
considered as existing aid since the limitation period has
expired.

investments

4.
The remaining measures described in the present decision
in favour of Chupa Chups, namely a EUR 35 000 000 credit
from ICF, EUR 1 590 000 export refunds from EAGGF, the
endorsement by the Asturias
a
loan of EUR 4 480 000 and the deferments of
commercial
taxes granted by the Spanish tax agency do not constitute
State aid within the meaning of Article 87(1) of the Treaty.

regional government of

Article 2

Spain shall recover the aid referred to in Article 1(1) from

1.
the beneficiary.

2.
The sums to be recovered shall bear interest from the date
on which they were put at the disposal of the beneficiary until
their actual recovery.

3.
The interest shall be calculated on a compound basis in
accordance with Chapter V of Commission Regulation (EC)
No 794/2004 (29).

Spain shall cancel all outstanding payments of the aid
from the date of

4.
referred to in Article 1(1) with effect
adoption of this Decision.

The State aid which Spain is planning to implement for
2.
is incompatible
Chupa Chups, amounting to EUR 800 000,
with the common market. This part of the aid may accordingly
not be implemented.

Article 3

Recovery of the aid referred to in Article 1(1) shall be

1.
immediate and effective.

The remaining State aid which Spain has implemented in
3.
favour of Chupa Chups,
subsidy of EUR
1 580 000 in support of investments in the Barcelona plant,
a subsidy of EUR 4 330 000 supporting the building of the

comprising a

Spain shall implement this Decision within four months

2.
following the date of its notification.

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

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L 244/29

Article 4

1. Within two months
this
Decision, Spain shall submit the following information to the
Commission:

following notification of

the aid referred to in Article 1(1) has been
recovery of
completed. It shall immediately submit, on simple request by
information on the measures already taken
the Commission,
and planned to comply with this Decision.
shall also
provide detailed information concerning the amounts of aid
and recovery interest already recovered from the beneficiary.

It

(a)

the total amount
recovered from the beneficiary;

(principal and recovery interest) to be

(b) a detailed description of the measures already taken and

planned to comply with this Decision;

(c) documents demonstrating that

the beneficiary has been

ordered to repay the aid.

Spain shall keep the Commission informed of the progress
2.
of the national measures taken to implement this Decision until

Article 5

This Decision is addressed to Spain.

Done at Brussels, 10 May 2007.

For the Commission

Neelie KROES
Member of the Commission