EU launches probe into state aid to Spanish food firms

21st May 2008, Comments 0 comments

The two Spanish food companies in the question are suspected of receiving illegal state aid in 2007.

21 May 2008

MADRID - The European Commission (EC) on Tuesday said it had launched a formal probe into whether two Spanish food companies had received possible illegal state aid.

European regulations forbid state aid to companies other than those involved in the defence industry if it breaches rules ensuring free competition.

In a statement, the Commission said the Spanish authorities had informed it in April and May of 2007 of the assistance granted to El Pozo Alimentación and García Carrión La Mancha for the enlargement and improvement of some of their plants located in Spain.

The level of the aid for El Pozo was EUR 15.1 million and for García Carrión, EUR 14.5 million.

The Commission noted the investments had already been initiated before approval by the EU executive. It also said the two companies receiving the assistance appear not to have submitted the relevant applications to the Spanish authorities for the aid to carry out the investments.

"The Commission has, therefore, decided to investigate whether these measures constitute incompatible state aid," the statement said.

The EC in 2005 ordered Spanish state-owned shipbuilder Izar to return EUR 1.1 billion in state-funding that breached EU competition rules.

[El Pais / Expatica]

0 Comments To This Article