2008/366/EC: Commission Decision of 30 January 2008 on State aid C 35/06 (ex NN 37/06) implemented by Sweden for Konsum Jämtland Ekonomisk Förening (notified under document number C(2008) 311) (Text with EEA relevance)
Date: 2008-01-30
Institutions: European Commission
Subjects: State aid, Sweden, control of State aid, credit sale, land and buildings, public authorities

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

II

DECISIONS

COMMISSION

COMMISSION DECISION

of 30 January 2008

on State aid C 35/06 (ex NN 37/06) implemented by Sweden for
Konsum Jämtland Ekonomisk Förening

(notified under document number C(2008) 311)

(Only the Swedish version is authentic)

(Text with EEA relevance)

(2008/366/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty
Community,
and in particular
Article 88(2) thereof,

establishing the European
subparagraph of
the

first

Having regard to the Agreement of the European Economic
Area, and in particular Article 62(1)(a) thereof,

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

Whereas:

(1)

(2)

I. PROCEDURE

By a complaint registered on 14 November 2005, Den
Nya Välfärden informed the Commission about the sale
of a plot of land by the Municipality of Åre to Konsum
‘Konsum’)
Jämtland Ekonomisk Förening (hereinafter
allegedly involving illegal State aid.

the Commission
By letter dated 3 January 2006,
requested additional
information about the transaction
from the Swedish authorities, which was submitted by
letters dated 2 March 2006 and 28 March 2006.

(3)

(4)

(5)

(6)

(7)

(8)

By letter dated 3 January 2006, the Commission also
requested additional
information from the complainant
the transaction, which was submitted by letter
about
dated 1 February 2006.

By letter dated 19 July 2006, the Commission informed
Sweden that it had decided to initiate the procedure laid
down in Article 88(2) of the EC Treaty in respect of the
measure (2).

The Commission decision to initiate the procedure was
published in the Official Journal of the European Union (3).
The Commission invited interested parties to submit their
comments on the measure.

Sweden
submitted
27 September 2006.

observations

by

letter

dated

The Commission received no comments from interested
parties.

By letter of 24 January 2007 the Commission requested
further information, which was provided by the Swedish
authorities by letter dated 21 February 2007.

(1) OJ C 204, 26.8.2006, p. 5.

(2) Case C 35/06.
(3) See footnote 1.

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II. DETAILED DESCRIPTION OF THE MEASURE

(16)

The land sale was due to be approved at the Municipal
Council meeting of 24 August 2005 for a price of SEK 1.

(9)

(10)

1. Complainant (4)

The complainant, Den Nya Välfärden,
is a business
from a large
organisation financed by contributions
number of companies, acting on behalf of one of its
members, Lidl Sverige KB (hereinafter ‘Lidl’).

Lidl entered the Swedish market in September 2003 and
currently has 130 hard discount stores in Sweden. It is
forecast to reach 3 % of the market by the end of 2007,
while it had a market share of 2,2 % by the end of 2006.
It had a turnover of SEK 3,7 billion (around EUR 393
million) in 2006/07. Lidl has made losses since it began
its activities in Sweden and posted an operating loss of
SEK 339 million (around EUR 36 million) for 2006/07.

(11)

Lidl is a relatively small player in the food retail market
in Sweden.

2. Aid beneficiary (5)

(12)

Konsum is a cooperative society which sells consumer
the
goods,
Jämtland County.
it had a turnover of SEK
260 million (around EUR 28 million).

including food and groceries,
In 2004,

throughout

(13) On 1 January 2006, Konsum Jämtland Ekonomisk
Förening merged with Konsum Nord
Ekonomisk
Förening. Both companies are members of Kooperativa
Förbundet,
the Swedish Cooperative Union, which
gathers the country’s 51 consumer cooperative societies
with around 3 million members. It owns, among others,
42 % of Coop Norden, the second largest player in the
Fast Moving Consumer Goods (hereinafter FMCG) sector
in Sweden, with a market share of 16,2 % in 2005, and
the largest players in Denmark and Norway.
one of
is also active in real estate,
Kooperativa Förbundet
media and other activities.
It had profits of SEK 701
million (around EUR 74 million) and sales of SEK 24,4
billion (around EUR 2,6 billion) in 2006.

3. Land sale

(14)

The complaint concerns the sale of land by the Munici-
pality of Åre to Konsum for a price which was allegedly
below market value.

(15) On 5 October 2005,

the Municipal Council of Åre
land in Produkthusområdet
decided to sell a plot of
(Åre Prästbord 1:30, 1:68 and 1:69)
to Konsum for
SEK 2 million (around EUR 0,2 million). The sale was
not preceded by a public tender.

(4) Source of data in this section:
(5) Source of data in this section:

‘Just-food.com’; 26 October 2007.
information submitted by the
for

reports of Kooperativa Förbundet

complainant and annual
2005 and 2006.

(17) On 23 August 2005, however, Lidl submitted a bid of
SEK 6,6 million (around EUR 0,7 million) for the same
plot of
land by a phone call to the Municipal Chief
Executive Officer followed by an e-mail sent on the
same day.

(18) On 24 August 2005 Radio Sweden P4 Jämtland
publicised Lidl’s bid and interviewed a Municipal
Commissioner, who confirmed the submission of the bid.

(19)

Subsequent to Lidl’s bid, the Municipal Executive Office
renegotiated the sale price with Konsum and a revised
price of SEK 1 million was agreed.

(20) On 24 August 2005,

the Municipal Executive Board
approved the sale for SEK 1 million. The minutes of
this meeting refer to Lidl’s bid as the basis for the
decision to sell the land for SEK 1 million and not for
SEK 1, as originally planned. According to the minutes,
the Municipal Executive Office was given the task of
trying to find an alternative site in Åre for Lidl.

(21)

(22)

(23)

Executive

The sale for SEK 1 million was later revoked by the
Municipal
of
Board
20 September 2005 following an appeal by two
members of the Municipality to the County Adminis-
trative Court.

its meeting

in

Finally, the sale for SEK 2 million was approved by the
Municipal Executive Board on 5 October 2005. An
official
letter of the Municipal Executive Office to the
Municipal Council dated 20 September 2005 refers to
Lidl’s bid and mentions that
the Municipal Executive
Office has been in contact with Lidl concerning its estab-
lishment in another place.

By letters of 28 October 2005 to the Municipal Executive
Board and of 30 November 2005 to Den Nya Välfärden,
Lidl confirmed that its SEK 6,6 million bid still stood and
that it would be interested in participating in any tender
for the land.

(24) At the time of the sale, Konsum was already established
in the Municipality of Åre and Lidl was trying to open its
first outlet in Åre.

III. DECISION TO INITIATE PROCEEDINGS UNDER
ARTICLE 88(2) OF THE EC TREATY

(25)

The Commission decided to open the formal
gation procedure mainly for the following reasons:

investi-

— The sale was not preceded by a public tender;

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— The Swedish authorities had been unable to provide
evidence of an independent evaluation of the land,
even though they mentioned an evaluation of some
plots of land in the same area carried out by Ernst &
Young Real Estate;

Municipal Council’s decision to approve the sale of the
land to Konsum.

1. Evaluation report

— The price of

increases

the sale to Konsum and Lidl’s bid
seemed to be directly comparable and there seemed
to be no specific conditions attached to Lidl’s bid.
The various
in the planned sale price
to Lidl’s bid (from SEK 1 to SEK 1
subsequent
million and,
to SEK 2 million) seemed to
finally,
this finding. Since Lidl’s bid was higher
support
than the actual sale price, State resources seemed to
be involved;

(31)

The evaluation report does not specifically concern the
plot of land sold to Konsum, but rather other plots in
the same area, one of which is adjacent to the land
bought by Konsum. The evaluation, which dates from
May 2003 (7), is based on information in the consultant’s
databases, actual tenancy agreements and purchases and
standardised operating
for
comparable properties. The evaluation was based on a
cash flow analysis, taking into account the intended use
of the land.

and maintenance

costs

— The measure might affect

trade between Member
States, in particular since both Konsum and Lidl are
international players;

(32) According to the evaluation, the market value of the land
sold to Konsum would amount to SEK 1,65 million,
which compares to the actual transaction price of SEK
2 million.

— The measure did not seem to be compatible with the
regional aid guidelines and there seemed to be no
other possible legal basis for approving the aid.

(33)

IV. COMMENTS FROM INTERESTED PARTIES

(26)

The Commission received no comments from interested
parties.

(27)

(28)

V. COMMENTS FROM SWEDEN

The main argument put forward by the Swedish authori-
ties was that the sale to Konsum was part of a series of
land deals, notably involving the sale by Konsum of a
plot of land in another area of Åre (Åre Torg, located in
the city centre), which was to be used by the Munici-
pality for other development purposes.

Through the land sale, Konsum relocated its outlet away
from that area,
thereby allowing the Municipality to
achieve its aim. Accepting Lidl’s bid would not allow
the Municipality to pursue this new development plan,
since Konsum would have remained at
its current
premises.

(29) However, the sale contract does not mention any other
land deal nor the value of the land sold by Konsum in
the other area of Åre (6).

(30)

Two new relevant documents were submitted by the
Swedish authorities, namely the evaluation report from
Ernst & Young Real Estate and a judgement of
the
Jämtland County of 24 May
Administrative Court of
the Åre
2006 on the appeal against

the decision of

(6) A previous draft contract for the sale of the land for SEK 1 million
did contain an obligation for Konsum to sell the city centre land
within a deadline, but
in the final
contract.

this clause was not present

The Swedish authorities claimed that, when selling the
land, they took into account the fact that the evaluation
from Ernst & Young Real Estate was conducted in May
2003 and the sale was carried out in October 2005,
almost
later. However, no
evidence of this was provided.

two and a half years

2. Judgement by the County Administrative Court

(34)

The County Administrative Court’s review was confined
to the legality of
the decision. The Court assessed
whether the Municipality had exceeded its powers, by
favouring a private business for no particular reason.

(35)

The County Court decided that the decision was legal
and that there was no favouring of the buyer for the
following reasons:

— Lidl’s bid was received just before the Municipal

Council issued its decision;

— The sale concerned land which was subject to special
utilisation conditions, according to the master de-
velopment plan applicable to the area;

— There was not enough evidence that the sale price

was below market value;

— The decision of

the Municipal Council must be
regarded as part of a larger plan to relocate busi-
nesses
centre. This plan
from the
included the sale of the land to Konsum.

away

city

(7) The sale itself occurred in October 2005.

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3. Further information submitted by the Swedish

(42)

authorities

Such an evaluation must be carried out by one or more
independent asset evaluators (9) prior to the sale nego-
tiations,
in order to establish the market value of the
asset on the basis of generally accepted market indicators
and evaluation standards.

(36)

(37)

(38)

In January 2007, DG COMP requested the Swedish auth-
orities to explain the methodology which they had used
to reflect the time lag between the date of the evaluation
by Ernst & Young Real Estate (May 2003) and the date of
the transaction (October 2005) on the sale price and to
provide evidence in this respect.

In February 2007 the Swedish authorities provided a
letter signed by the Head of the Town Council of Åre,
where several general market indexes (Retail Price Index,
Property price index for retail outlets, etc.) are applied to
the sale price in order to estimate the increase in price of
the land during the period mentioned above.

for 2005,

The most relevant index is the property price index for
retail outlets, which relates to built-up areas in larger
towns and,
is composed of approximately
one-third shopping centres and two-thirds other retail
outlets. All
the
land at the time of the sale which is lower than the
actual sale price.

indexes lead to an updated value of

(39)

The Swedish authorities argued that there is basically no
market for business/retail activities in Åre and so this
evaluation could not
the prices of
real transactions.

take into account

(46)

VI. ASSESSMENT OF THE MEASURE

1. State aid under article 87(1)

(40)

The existence of State aid must be assessed with reference
aid
to the Commission Communication on State
elements in sales of land and buildings by public auth-
orities (8) (hereinafter ‘Communication’).

1.1. Use of State resources

1.1.1. A p p l i c a t i o n o f

t h e C o m m u n i c a t i o n

(41)

The Communication lays down two possibilities for
excluding the presence of State aid in sales of land and
buildings by public authorities: when the sale is carried
through an unconditional bidding procedure,
out
accepting the best bid or,
such
procedure, when the sale price is at least equal to the
value established by an independent expert evaluation.

in the absence of

(8) OJ C 209, 10.7.1997, p. 3.

(43)

In the case at hand,
there was no formal bidding
procedure. There was an ex ante evaluation of an
adjacent plot of
land, which was undoubtedly carried
out by an independent asset evaluator and on the basis
of generally accepted evaluation standards, within the
meaning of
the Communication (see Section V.1
above). Although the evaluation did not concern the
plot which was sold but rather an adjacent plot, the
result of the evaluation can be considered as a reasonable
estimate of the market price of the land at the time it
was carried out.

(44) However, this evaluation was carried out in May 2003,
almost two and a half years before the sale took place (in
October 2005). During such a long period of time, the
value of the land may have changed significantly.

(45) During the formal

investigation procedure and on the
basis of a request from the Commission, the Swedish
authorities provided an update of this evaluation (see
Section V.3 above).

There seems to have been no formal updating of the
Ernst & Young evaluation before the sale took place, to
take into account the time lag between the date of the
evaluation and the date the land was sold to Konsum.
Otherwise, the Swedish authorities would have provided
such evidence dating back to around the transaction date.
Thus, it seems very likely that the information provided
by Sweden in February 2007 is an ex post justification for
the sale price.

(47) Unlike the Ernst & Young evaluation, the update was not
performed on the basis of generally accepted evaluation
standards (e.g. cash flow analysis), taking into account
expected future revenues. It does not constitute a full
the land, but rather the application of
evaluation of
theoretical
general market
increase in price of
the indexes
(e.g. Retail Price Index) and
provided are very general
national in scope and thus do not seem to be adequate
in the context of the specific sale.

to estimate
the land. Most of

indexes

the

(9) An asset evaluator is defined as a person with appropriate academic
qualifications and experience. The evaluator must be independent, in
the sense that the public authorities should not be entitled to issue
orders as regards the result of the evaluation. State evaluation offices
and public officers or employees are regarded as independent
provided that undue influence on their
is effectively
excluded.

findings

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(48)

(49)

The real estate index seems to be the most appropriate
one. However, it is national in scope and does not take
into account the specificity of the region in which the
sale took place. Also, it relates mostly to larger towns,
while Åre is a small town. Furthermore, it does not relate
to the particular
to
consumer retail
it is not certain
in general. Therefore,
that this index captured the actual trend of real estate
prices for food retail purposes in Åre from May 2003 to
October 2005.

sector, but

food retail

rather

The argument from the Swedish authorities that there is
basically no market for business/retail activities in Åre —
an argument which was put forward as justification for
not taking into account the prices of real transactions —
is somehow contradicted by the fact that, in 2003, Ernst
& Young was able to perform a full evaluation based on
the market prospects of the land for the particular food
retail activity and on actual
tenancy agreements and
purchases in the same area.

(50)

In any case, before the sale took place there was an
in the Commission’s opinion, more
alternative and,
the land,
reliable indicator of
(see Section
namely the bid put
VI.1.1.3 below).

the market price of
forward by Lidl

(51)

(52)

1.1.2. C o n d i t i o n s a t t a c h e d t o t h e s a l e

to urban planning
The land in question was subject
i.e. a
restrictions, namely as regards its intended use,
the
commercial
food
and
and
outlet,
be
restrictions must
These
commercial
considered within the Municipality’s own legitimate
public law powers.

groceries
surface.

The Swedish authorities argued that the disputed land
deal was part of an overall deal,
involving the sale of
land in the city centre by Konsum to the Municipality to
be used for other development purposes, in accordance
with the Municipality’s master
development plan.
However, there is no formal
link whatsoever between
the two transactions in the sale contract and during
the Commission’s investigation Sweden did not submit
any concrete information regarding the other transaction
or showing that the two transactions were part of one
single deal.

(53) No relevant

restrictions were imposed in the sale
contract. Thus,
it must be considered that there were
no ‘special obligations’ attached to the sale, within the
meaning of the Communication.

(54)

There were no conditions attached to Lidl’s bid or to the
sale contract. The activity to be developed on the land
would be similar (food and groceries retail outlet) and in

line with the urban planning restrictions legitimately
imposed by the Municipality. Therefore,
the bid put
forward by Lidl and the actual sale price to Konsum
are directly comparable.

1.1.3. A p p l i c a t i o n o f t h e m a r k e t e c o n o m y

i n v e s t o r p r i n c i p l e

(55) According to established case law (10), the starting point
in assessing whether the sale involved state resources
must be the market economy investor principle (here-
‘MEIP’). According to this principle,
inafter
the aid
amount involved in the sale of a public asset is equal
to the difference between what the recipient in fact paid
and what it would have had to pay in an arm’s-length
transaction on the open market to buy an equivalent
property from a private vendor at the time of the sale.

(56)

Therefore, should a private seller have been able to sell
if Lidl’s bid was
the land to Lidl at the bid price,
credible and binding, State resources would have been
present.

i.e.

(57)

The Commission considers that Lidl’s bid was credible
and binding, for the following reasons:

— Lidl’s bid was first put forward on 23 August 2005
by a phone call to the Municipal Chief Executive
Officer followed by an e-mail sent on the same
day. The bid was not submitted by more formal
means because Lidl had just become aware that the
sale was to take place at a price of SEK 1 on the
there was
following day.
therefore no time for formalising the bid in any
other way;

It can be assumed that

— On 24 August 2005 the bid was publicised by a
radio station which interviewed a Municipal Com-
missioner on the subject. The credibility of the bid
was not put in question;

— On the same day that Lidl submitted its bid, the
Municipal Executive Office renegotiated the sale
price with Konsum, which immediately agreed to
instead of SEK 1.
pay SEK 1 million for the land,
On the following day,
the Municipal Executive
Board approved the sale for SEK 1 million. The
minutes of this meeting refer explicitly to Lidl’s bid
as the basis for the decision to sell the land for SEK 1
million and not for SEK 1, as originally planned.
According to the minutes, the Municipal Executive
Office was given the task of trying to find an alter-
the
native site for Lidl. This demonstrates
municipal
already
themselves
deemed Lidl’s bid credible and binding;

authorities

that

had

(10) See,

for example,

Judgment of

the Court of First

Instance of

29 March 2007 in Case T-366/00 (‘Scott’).

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— An official letter of the Municipal Executive Office to
the Municipal Council dated 20 September 2005
referred to Lidl's bid and mentioned that
the
Municipal Executive Office had been in contact with
Lidl concerning its establishment in another place in
Åre;

— By letters of 28 October 2005 to the Municipal
Executive and of 30 November 2005 to Den Nya
Välfärden, Lidl confirmed that its SEK 6,6 million
bid still stood and that it would be interested in
participating in any tender for the land;

— During

the whole

the
Swedish authorities never questioned the credibility
of Lidl’s bid;

investigation procedure,

— Lidl

is

a well

known international

company
competing directly with Konsum in the food and
groceries
retail market. Lidl had been opening
outlets in Sweden since 2003 in a strategic move
to profit from the growing demand for and market
share of the hard discount segment in the FMCG
sector in the Nordic countries. Thus, it can reasonably
be assumed that it was indeed interested in the land
sold to Konsum.

(58)

(59)

that Lidl’s credible and
The Commission considers
binding bid, which was higher than the price of the
land as estimated by the updated evaluation, is a better
indicator of the market value of the land, since it reflects
how much the market was willing to pay for the land at
the date of the sale.

Even if the expert evaluation had been carried out in
i.e. an evaluation
accordance with the Communication,
of the actual plot of land that was to be sold carried out
just before the sale and on the basis of generally accepted
evaluation standards, this evaluation would only be a
second best instrument to determine the market price
in the absence of real price offers. From
of the land,
and binding bid is
the moment
credible
submitted and provided that
this bid is directly
than the price estimate
comparable to and higher
according to the
former must be
preferred. The bid establishes a real market price and
should be
the
a better proxy for
foregone State resources than an expert evaluation.

considered as

evaluation,

that

the

a

1.2. Economic advantage

(61)

If a public tender had been conducted, the price of the
land would have reached at least the amount offered by
Lidl and Konsum would have had to pay at least this
price for the land. Thus, the Commission considers that,
in the case at hand, the land sale conferred a selective
economic advantage to Konsum equal to the difference
between Lidl’s bid and the actual sale price.

(62)

(63)

(64)

1.3. Distortion of competition and effect on trade between

Member States (11)

Both the complainant and the aid beneficiary are active
in the FMCG sector. This sector can be further split into
four sub-sectors: soft discount, hard discount, hyper-
markets and supermarkets/service shops/shops at petrol
stations. In 2005, the market shares of these sub-sectors
were: supermarkets — 68,4 %; hypermarkets — 16,4 %;
soft discount — 11,5 %; and hard discount — 3,7 %. The
consumer cooperative market share of the FMCG sector
was 16,2 % in the same year.

is
The Swedish wholesale
dominated by four groups:
ICA Ahold, Axfood AB,
Coop Norden and BergendahlsGruppen AB, accounting
for about 80 % of the commodity retail market (12).

food market

and retail

The Swedish retail food industry has long been charac-
terised by stable structures and a low degree of inter-
nationalisation. However, this picture began to change
in 1999 when the Dutch retail food giant Ahold took
over a 50 % stake in Sweden’s leading retailer ICA. Sub-
sequently,
there has been a wave of consolidations
among the Nordic retailers and the companies are
becoming more Nordic
their
perspective.

domestic

than

in

(65)

The general
trend has been an increase in the sales
volumes by hypermarkets and large supermarkets, while
small and medium-sized stores have lagged behind.

(66) Discount stores have been gaining market share. Between
1990 and 2002, discount stores increased their share of
total sales from 3 % to 13 %. In response to this trend,
the Nordic retailers have been opening up their own
discount units and increasing the number of products
sold under their own label.

(60)

Thus, the Commission concludes that there was a loss of
State resources, amounting to the difference between the
bid put forward by Lidl and the actual sale price (SEK 4,6
million, around EUR 0,5 million).

(11) Source of data in this section: Annual

report of Kooperativa
Förbundet for 2005 and ‘Finland, retail food sector, 2003 report’
by the Global Agriculture Information Network.

(12) Data refers to 2002 but is not expected to have changed signifi-

cantly since.

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(67) During

the

formal

the
Commission confirmed its initial assessment
the
measure distorted competition and had the potential to
affect trade between Member States.

investigation

procedure,

that

(68)

Competition was affected through the distortion of asset
allocation between competing firms. The food and
groceries retail market is mainly of a local or regional
character. However, by occupying a place in the market
which affected an entry strategy of a foreign competitor,
the measure had the potential to affect trade between
Member States.

(69) Also,

the aid reinforced the financial position of an
undertaking with international activities. According to
the case law of the Court (13) ‘when State financial aid
strengthens the position of an undertaking compared
with other undertakings competing in intra-Community
trade the latter must be regarded as affected by that aid
in Case 730/79 Philip Morris v Commission
(judgment
[1980] ECR 2671, paragraph 11). For that purpose,
it
is not necessary for the beneficiary undertaking itself to
export its products. Where a Member State grants aid to
an undertaking, domestic production may for that reason
be maintained or increased with the result that under-
takings established in other Member States have less
chance of exporting their products to the market
in
that Member State (judgment in Case 102/87 France v
Commission [1988] ECR 4067, paragraph 19).’

1.4. Conclusion

(70)

The measure constitutes State aid, within the meaning of
Article 87(1) of the EC Treaty.

2. Compatibility

(71)

formal

the Commission indicated that,

investigation
In its decision to open the
the
if
procedure,
there
presence of State aid were to be confirmed,
for declaring the measure
seemed to be no basis
compatible with the Treaty (14).
In particular, the land
sale could not be considered as a compatible investment
aid under the Guidelines on national regional aid (15).
Rather, it constitutes operating aid which, according to
point 4.15 of those Guidelines, is not allowed in assisted
areas under Article 87(3)(c) of the EC Treaty (16). The
Commission also confirms its initial conclusion that
there are no alternative legal grounds for exempting
the aid from the general prohibition principle.

(13) See, for example, paragraph 40 of the Judgment of the Court of
14 September 1994, Kingdom of Spain v Commission of
the
Joined Cases C-278/92, C-279/92 and
European Communities,
C-280/92.

(14) See paragraphs 29-32 of the decision to open the formal investi-

gation procedure.

(15) OJ C 74, 10.3.1998, p. 9.
(16) In this respect see,

in particular, paragraphs 30 and 31 of the

decision to open the formal investigation procedure.

(72)

Even if the distortion of competition seems to be rather
in nature and the effect on trade may be fairly
local
limited, Sweden did not provide
any evidence of
objectives of common interest being addressed by the
aid. Rather, the Swedish authorities concentrated their
arguments on the existence of state aid and did not
provide any compatibility arguments.

(73)

This preliminary conclusion is therefore confirmed.

(74)

(75)

(76)

(77)

3. Recovery

Since the measure was implemented without prior noti-
fication to the Commission and is incompatible with
State aid rules, the Swedish authorities are required to
recover the aid from the beneficiary.

It should be recalled, in this context, that the purpose of
recovery is to restore the situation existing prior to the
granting of the aid. This is achieved once the unlawful
and incompatible aid is repaid by the recipient, who
thereby forfeits the advantage which he enjoyed over
to be
his competitors
recovered should be such as to eliminate the economic
advantage given to the beneficiary.

in the market. The amount

Since the aid to Konsum is equal
to the difference
between Lidl’s bid and the actual sale price — SEK 4,6
million (around EUR 0,5 million) — this is the aid
amount to be recovered.

Therefore, the Swedish authorities are required to recover
from Konsum an amount of SEK 4,6 million plus the
recovery interest, calculated according to Article 9 of
Commission Regulation (EC) No 794/2004 of 21 April
2004 implementing Council Regulation
(EC) No
659/1999 laying down detailed rules for the application
the EC Treaty (17).
Interest shall be
of Article 93 of
payable from the date the unlawful aid was put at the
disposal of Konsum until the date effective recovery takes
place.

VII. CONCLUSION

(78)

The Commission finds that Sweden has unlawfully im-
plemented, in breach of Article 88(3) of the EC Treaty,
the sale of land in question. The Commission considers
that such a measure, which constitutes pure operating
is not eligible for any derogation under the EC
aid,
treaty, and is therefore incompatible with the common
market. Therefore, the aid has to be recovered,

(17) OJ L 140, 30.4.2004, p. 1, as last amended by Regulation

(EC) No 1935/2006 (OJ L 407, 30.12.2006, p. 1).

L 126/10

EN

Official Journal of the European Union

14.5.2008

HAS ADOPTED THIS DECISION:

Article 1

The State aid, amounting to SEK 4,6 million, unlawfully granted
by Sweden, in breach of Article 88(3) of the Treaty, to Konsum
Jämtland Ekonomisk Förening
incompatible with the
common market.

is

(a) The total amount (principal and recovery interest) to be

recovered from the beneficiary;

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

planned to comply with this decision;

Article 2

(c) Documents demonstrating that

the beneficiary has been

ordered to repay the aid.

Sweden shall recover from the beneficiary the aid referred

1.
to in Article 1.

The sum to be recovered shall bear interest for the entire
the

2.
period running from the date on which it was put at
disposal of the beneficiary until its actual recovery.

3.
The interest shall be calculated as capitalised interest in
conformity with Chapter V of Commission Regulation (EC) No
794/2004.

the national measures taken to implement

Sweden shall keep the Commission informed about the
2.
the
progress of
it has been
recovery of the aid referred to in Article 1 until
immediately submit, at the Commission’s
completed.
information on the measures already taken and
request,
planned to comply with this Decision.
It shall also provide
detailed information concerning the amounts of aid and
recovery interest already recovered from the beneficiary.

It shall

Article 3

Article 5

1.
Recovery of
immediate and effective.

the aid referred to in Article 1 shall be

This Decision is addressed to the Kingdom of Sweden.

Sweden shall ensure that this Decision is implemented

2.
within four months of the date of its notification.

Done at Brussels, 30 January 2008.

Article 4

1. Within two months of the notification of this Decision,
Sweden shall
following information to the
Commission:

submit

the

For the Commission

Neelie KROES
Member of the Commission