Italian Dairy Aid Illegal

ITALY - The European Commission has declared that state aid paid to the Italian dairy sector is illegal.
calendar icon 19 July 2013
clock icon 2 minute read

The aid was a deferred payment given to milk producers liable to the Italian State for the amount of the milk levy, which Italy had paid to the Union budget on their behalf under an aid scheme approved by a Council Decision.

However, the Commission has now declared the aid to be incompatible with the internal market.

The Council Decision 2003/530/EC authorised Italy to itself pay the amount of the milk levy due from these producers for the period 1995/1996 to 2001/2002 into the Community budget and then to recover this amount from them in 14 equal instalments without interest.

In 2011, Italy adopted a law granting milk producers a six-month deferment of payment with regard to one of these instalments. Those producers who took advantage of this deferment received aid equivalent to an interest-free loan which cannot be justified by any competition rule. Moreover, the deferment infringes the Council Decision by breaching the condition that instalments be of equal size and, for those that made use of it, introduces a system of instalments which is no longer covered by the Council Decision and cannot be justified either by any competition rule.

Italy will have to recover the incompatible aid together with the interest due. However, at the recovery stage, any aid which is consistent with the de minimis Regulation for agriculture will not be regarded as state aid and will therefore not have to be recovered.

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