State aid: Commission orders Sweden to recover incompatible aid from property sale by Municipality of Vänersborg

European Commission - Press release

State aid: Commission orders Sweden to recover incompatible aid from property sale by Municipality of Vänersborg

Brussels, 08 February 2012 - The European Commission has concluded that the sale of a food processing facility from the Swedish municipality of Vänersborg to the real estate company Hammar Nordic Plugg is incompatible with EU state aid rules. Since the sale was not carried out at market conditions, it gives the company an undue economic advantage over its competitors. The Commission has therefore ordered Sweden to recover SEK 14.5 million (around € 1.61 million) from the beneficiary.

Following a complaint, the Commission opened an in-depth investigation in October 2010 concerning the sale of the food processing facility. Hammar Nordic Plugg bought the facility from the Municipality of Vänersborg on 11 August 2008 for SEK 8 million (around € 0.9 million) and shortly thereafter sold it to a group of private investors for SEK 40 million (around € 4.4 million) (see IP/10/1394). The Municipality of Vänersborg had previously bought the property for SEK 17 million (around €1.8 million).

Under EU State aid rules, asset sales by public authorities can be considered free of aid when they are carried out 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 the buyer an economic advantage that his competitors do not have.

The Commission's investigation has shown that the Municipality of Vänersborg sold the property well below its market value. The difference between the market value and the price paid by Hammar Nordic Plugg constitutes state aid. The Commission has found that the aid was incompatible with EU rules, as it merely procures an undue advantage to Hammar Nordic Plugg over its competitors without furthering any objective of common interest. The Commission has therefore ordered Sweden to recover the aid, estimated at SEK 14.5 million (plus interest) from Hammar Nordic Plugg.

Background

The non-confidential version of the decision will be made available under the case number SA.28809 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.