Italy going too far to prop up AI-struck poultry sector

06-07-2006 | |

The European Commission has launched an investigation into Italy’s bid to prop up its ailing poultry sector, hit by a drop in demand due to avian influenza.

The EC says that the government’s measures in response to the bird flu crisis in Italy may be illegal under the EU’s rules.

The investigation will look into the aid provided for under a new law, which provides for the purchase by the government of 17,000 tonnes of poultry meat and other poultry products.

The new law also suspends tax, social security contributions and payments for operators in the poultry sector, while allowing the government to grant aid for loans relating to the conversion and restructuring of poultry operations affected by the crisis.

“At this stage, the aid provided for the scheme seems difficult to justify in the light of state aid rules,” the Commission said in a statement.

Italy’s government has one month to comment on the investigation and to provide details of its proposed aid for the sector.

Consumption of poultry meat has dropped by more than half in some EU states, with 300,000 tonnes and more in storage across the bloc, according to previous EU estimates. Import measures have also restricted the supply of poultry meat into the bloc.

For more information, see the Commission’s statement on its investigation into measures to combat the bird flu crisis in Italy .