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European Commission authorises 'slaughter tax' state aid in France

by 5m Editor
5 April 2004, at 12:00am

UK - The Commission has decided not to object to measures benefiting livestock farmers and slaughterhouses financed by a new French 'slaughter tax' and by direct budget contributions.

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Since the beginning of the year the French rendering service has been part-financed by a direct state aid, partly a compulsory levy borne by the slaughterhouses and partly a direct contribution from beef cutting establishments, traditional pork butchers and pig and poultry farmers.

The slaughter tax is used to finance the collection and processing of animals found dead on farms (costing c. 351m a year) and the cost of collecting, processing and incinerating slaughter waste (costing 363.5m a year). Total public funding to be used for the public rendering service, financed by the tax or directly from the state budget, amounts to c. 3169m.

The reasons given by the Commission were:

  • Funding by the state for animals found dead on farms, at a rate of between 75 percent and 100 percent depending on the species, constitutes a state aid benefiting farmers compatible with Community competition rules. For the aid rate of 100 percent the Commission verified that the aid was financed by means of levies or compulsory contributions limited to the meat sector and directly imposed by that sector.

  • Funding for slaughter waste does not constitute a state aid because there is no economic benefit to the slaughterers. The absence of economic benefit to slaughterhouses is mainly the result of the amount of the slaughter tax levied per tonne of waste to be paid by each undertaking concerned. As a result of the mechanism introduced by the tax, then, the slaughterhouses are fully financing the service from which they are benefiting. They do not derive any economic benefit.

  • The fact that the tax does not affect products imported from other member states also constitutes a key factor favouring its authorisation.

Source: National Pig Association - 4th April 2004

5m Editor