2008/696/EC: Commission Decision of 11 March 2008 amending the Commission Decision of 10 May 2007 on the measures C 1/06 (ex NN 103/05) implemented by Spain for Chupa Chups (notified under document number C(2008) 868) (Text with EEA relevance)
Date: 2008-03-11
Institutions: European Commission
Subjects: Spain, State aid, aid to undertakings, company in difficulties, control of State aid, food industry, regional aid

L 235/10

EN

Official Journal of the European Union

2.9.2008

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

II

DECISIONS

COMMISSION

COMMISSION DECISION

of 11 March 2008

amending the Commission Decision of 10 May 2007 on the measures C 1/06 (ex NN 103/05)
implemented by Spain for Chupa Chups

(notified under document number C(2008) 868)

(Only the Spanish text is authentic)

(Text with EEA relevance)

(2008/696/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 on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having regard to the Community Guidelines on State aid for
rescuing and restructuring firms in difficulties (1),

Whereas:

(1)

The Commission adopted a decision on 10 May 2007 on
the measures C 1/06 (ex NN 103/05) implemented by
Spain for Chupa Chups (2).

(3)

(4)

the decision in question,

Communities against
the
Commission concluded that it had committed an error
of assessment as regards one part of measure 4 (EUR
800 000 granted in 2003 under a regional aid scheme).

In point 43 of the contested decision, the Commission
noted that it had been made clear that the regional aid
scheme could not apply to companies in difficulties.
Given the heavy losses incurred by Chupa Chups in
2002 (EUR 22 078 000, corresponding to 86,5 % of
the subscribed capital at the end of the financial year)
and the 2003 results, the Commission considered that
Chupa Chups had to be regarded as a company in diffi­
culties at the time the aid was granted. The Commission
concluded that this part of the aid was thus incompatible
with the common market and could therefore not be
implemented.

Concerning the EUR 800 000 of regional aid granted in
2003 under the ‘Minería 2’ programme, the Commission
notes that
this aid forms part of an approved aid
scheme (3). Furthermore, contrary to its first assessment
at the initiation of the formal investigation procedure, the
Commission considers that Chupa Chups was eligible for
this aid since, at
the
company was not in difficulties (4). In particular:

the time the aid was granted,

(2)

Following an appeal lodged by Chupa Chups S.A. (Chupa
Chups) before the Court of First Instance of the European

(1) OJ C 288, 9.10.1999, p. 2.
(2) OJ L 244, 19.9.2007, p. 20. Notified on 11 May 2007 under

number C(2007) 1710.

(3) Order of 17 December 2001 laying down the regulatory bases for granting
aid for business projects that generate employment and promote alternative
development of mining areas. The ‘Mineria 2’ programme was approved
by the Commission on 27 November 2001 (letter C(2001) 3628).
(4) Within the meaning of the 1999 Community Guidelines on State

aid for rescuing and restructuring firms in difficulty.

2.9.2008

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Official Journal of the European Union

L 235/11

still

(a) despite the heavy losses of EUR 22 078 000 incurred
in 2002, at the end of that financial year Chupa
Chups accounts
showed reserves of around
EUR 59 930 000. Those reserves were sufficient to
absorb all the losses, which therefore had no impact
on the company’s subscribed capital of EUR 12
million. Moreover, after deduction of
the 2002
losses, Chupa Chups
still had equity of EUR
49 850 000;

the guidelines, were not present
In particular,

(b) the Commission considers that many of the usual
signs of a firm in difficulty, as described in point 6
of
in the period
losses
2002-2003.
diminished (5), as did debts (both long- and short-
term) and stock inventories (6), whereas
financial
expenses remained stable;

rate of

the

where more than half of its registered capital has disap­
peared and more than one quarter of that capital has
been lost over the preceding 12 months.

Even if Chupa Chups had losses corresponding to more
than half of its subscribed capital, the criterion that more
than half of the subscribed capital has disappeared is not
met
in this case, because Chupa Chups had other
reserves.

Commission must

The
its
assessment and amend the Decision of 10 May 2007
as regards the assessment of the aid of EUR 800 000
envisaged in measure 4.

reconsider

therefore

The Decision of 10 May 2007 on the measures C 1/06
(ex NN 103/05) implemented by Spain for Chupa Chups
must therefore be amended,

(6)

(7)

(8)

(c)

finally, Chupa Chups’ positive evolution since 2002-
2003 has made it apparent that the company did not
fall under the general criterion in point 4 of the
to be
guidelines, according to which a firm is
regarded as being in difficulty ‘where it is unable,
whether
through its own resources or with the
funds it is able to obtain from its owner/shareholders
or creditors, to stem losses which, without outside
intervention by the public authorities, will almost
certainly condemn it to going out of business in
the short or medium term’.

The EUR 800 000 subsidy granted to Chupa Chups
under
therefore be
regional aid scheme must
deemed to constitute compatible aid.

this

HAS ADOPTED THIS DECISION:

Sole Article

Article 1(2) of the Decision of 10 May 2007 on the measures
C 1/06 (ex NN 103/05)
implemented by Spain for Chupa
Chups is replaced by the following:

‘2.
The State aid of EUR 800 000 of regional aid granted
in 2003 under the “Minería 2” programme is compatible with
the common market.’

This Decision is addressed to the Kingdom of Spain.

Done at Brussels, 11 March 2008.

(5)

In the appeal, it is argued that Chupa Chups was not a
company in difficulties within the meaning of point 5(a)
of the 1999 Community Guidelines on State aid for
rescuing and restructuring firms in difficulty (7). In the
Guidelines, a firm is regarded as being in difficulty

For the Commission

Neelie KROES
Member of the Commission

(5) EUR 22,07 million in 2002 and EUR 4,70 million in 2003.
(6) EUR 28,7 million in 2002 and EUR 23,29 million in 2003.
(7) See footnote 1.