July 5, 2006

EU to investigate Italian aid measures to poultry industry

The European Commission is investigating state aid granted by Italy to its poultry sector, which was severely affected by falling sales as consumer shun poultry due to bird flu earlier this year.

Among the measures taken by Italy's government are plans to buy 17,000 tonnes of poultry meat, suspension of tax payments and also financial aid for loans to restructure affected poultry businesses.

The EU executive said the scheme may be difficult to justify and may contradict state aid provisions under the EU.

Italy is given a month to submit details and comments to the European Commission. The issue would be debated before the Commission makes a decision.

EU has strict and complex aid rules in place to ensure no member state can give its industry an unfair advantage over other member states.