Brussels, 27 October 2010
State aid: Commission opens in-depth investigation into property sale by Swedish Vänersborg municipality
The European Commission has opened an in-depth investigation under EU State aid rules to establish whether the Municipality of Vänersborg (Sweden) sold a food production facility below its market value. Vänersborg bought the facility on 13 February 2008 for SEK 17 million (€1.7 million) and sold it on 11 August 2008 for SEK 8 million (€0.8 million) to the real estate company Hammar Nordic Plugg AB, which went on to sell it a few days later for SEK 40 million (around € 4 million). The Commission will investigate whether Hammar received a hidden subsidy through the low sales price. The opening of an in-depth inquiry gives interested third parties an opportunity to comment on the measure. It does not prejudge the final result of the investigation.
Commission Vice President in charge of competition policy Joaquín Almunia commented: "If the State sells a public asset below its real value, it gives an undue advantage to the buyer who gets taxpayers' property for less than what it is worth. This distorts competition, because other companies, that buy property on the market, will be charged much higher prices."
The Commission opened an in-depth investigation following a complaint, alleging that Sweden had granted illegal state aid to the real estate company Hammar Nordic Plugg AB. Hammar bought a food processing facility, formerly Topp Livsmedel, from the Municipality of Vänersborg for SEK 8 million (around €0.8 million) on 11 August 2008 and sold it a few days later to a private investor for SEK 40 million (around €4 million), making a profit of €3.2 in absolute terms. Vänersborg had previously bought the property for SEK 17 million (€1.7 million).
Under EU State aid rules, asset sales by public authorities can be considered free of aid when they are made at market value. Indeed, in a sale below market value, the buyer gets an asset for less than he would normally have had to pay. This gives him an advantage over his competitors. The Commission's investigation seeks to determine whether the price at which Vänersborg sold the property was in line with its market value. If not, the sale contains state aid and the Commission will verify whether such aid can be found compatible with EU state aid rules.
The non-confidential version of the decision will be made available under the case number C29/2010 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.