The Netherlands: Commission rejects Dutch investment aid for Holland Malt B.V.
On September 26, the Commission has decided under EC Treaty state aid rules to reject an investment aid of € 7,425,000 that the Dutch authorities committed to Holland Malt B.V. for the establishment of a production plant for malt in Eemshaven, province of Groningen.
The Netherlands gave this commitment at the end of 2003 under the suspending condition that the aid would have to be approved by the Commission. The plant itself was built in 2004. It started its operations in April 2005.
When assessing state aid for the processing and marketing of agricultural products, the Commission has to see whether sufficient market outlets exist. The Commission found that in the period in which the plant was built and in which it became operational, supply of malt in the EU clearly exceeded demand.
Malt prices were low and malting companies generally suffered from low profitability. In the last 12 months these bad market conditions led to a number of permanent closures of malt plants.
By mid 2006 the supply of malt in the EU dropped because of bad malting barley harvests and because maltsters, as a response to the bad market conditions, decided to lower production and both temporarily and permanently shut down production capacities. However, the resulting overall production capacity of malt in the EU still substantially exceeds total demand.
In addition, the Commission did not find convincing evidence that, as stated by the Netherlands, the premium malt that Holland Malt produces does not compete with other malts. Differences in the quality of malt occur on the market, but they would not seem to severely limit the interchangeability between malts.
Tilbage
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