Brussels, 25/07/2001 (Agence Europe) - On Wednesday, the European Commission decided to open an inquiry to ascertain whether State aid worth EUR 10 million complies with Community law. The aid is to be paid by the Italian poultry association to its poultry producers. If Italy does not demonstrate the exceptional nature of this State aid, the aid will not be authorised, recalls the Commission. The Italian association for intervention on agricultural markets (AIMA) plans to pay financial compensation for income losses due to the Belgian dioxin crisis in 1999. The crisis apparently caused a major fall in production, trade and a strong decline in the demand for poultry products in Italy. It should be noted that the amount of the aid corresponds to the difference between the average prices of countries not affected by the crisis and Italian prices during the June-July 1999 period.
The Commission considers that: - the market upheavals due to consumer concern about this contamination crisis is not in itself an exceptional event, allowing such aid to be justified; - the importance of the "media" impact of the crisis in Italy, as well as public awareness on food safety issues, do not at this stage seem sufficient to demonstrate the existence of an exceptional event. The Commission asks why Italian producers "could not have taken advantage of the situation and increased the sale of poultry products abroad (or even on national territory), given that, unlike Belgium, Italy was not among the countries directly affected by the dioxin crisis". The fact that poultry farmers had deep frozen unsold meat brings the Commission to conclude that sales of these stocks were made at a later date. If such were the case, the losses would be more limited than those declared in the context of the inquiry.