Tilly-Sabco is a well-known company in Brussels and for good reason. It has benefited for years from significant export subsidies. And it has twice been the subject of a particularly favorable positive opinion to receive a French subsidy. The abolition of aid did not come as a surprise. It had been planned for years. And the French company was perfectly aware... The proof

Favorable treatment

Tilly-Sabco has twice been the subject of a particularly favorable positive opinion to receive a French subsidy.

First in 2006, the European executive authorized the payment of a reimbursable advance of 3,6 million euros to deal in particular with the avian flu crisis and the drop in orders in the Gulf countries ( Yemen, Saudi Arabia). Then in 2009, the European Commission accepted that this aid would not be reimbursed but transformed into a subsidy, to enable the restructuring of the company.

At that time, experts were already noting the " heavy reliance (of Tilly-Sabco) on refunds ". The very detailed restructuring plan (more than 30 pages), approved by European experts, had the stated objective of " enable it to regain financial viability during the years preceding the end of the refunds and to prepare for the conversion of its activities ". The arguments of the bosses of the company believing that they had not been warned are therefore received with a smile in Brussels.

A long-time planned reduction

The abolition of “export refunds” did not come as a surprise. It had been planned for years. And the French company was perfectly aware. " The drop took place in three stages: from €32,5 (per 100kg) to 21,7 in October 2012, then to €10,85 in January 2013 and finally €0 in July 2013. Industrial players and the French authorities were informed in 2010 says the spokesperson for the Commissioner for Agriculture.

A decrease in subsidies already programmed in previous years. This chart, highlighting export subsidy rates, is telling enough not to elicit too many comments. We can clearly see, after a peak amount in the 1990s around 10 billion euros, a gradual decrease in successive stages until the 2010s.

A subsidy mechanism favorable to the French

Tilly-Sabco – like its counterpart Doux – are also well known in Brussels for having been the main recipients of European subsidies. It's quite simple. Almost all European subsidies have taken the direction of France in recent years.

Between 2003 and 2013, a total of 887,8 million euros were paid to support exports of poultry meat, including 767,7 million for French players in the sector, as shown in the table below. More than 90% was received by the French in 2011 (mainly Doux and Tilly Sabco). In 2012, France benefited from 75 million of the 79 million euros distributed (i.e. 95%). And 2013 should see a similar proposition, with 41 million out of the 47 distributed (or 87%).

Year	Total EU	Total France	% France / EU
2003	94,1	78,3	83%
2004	85,2	73,4	86%
2005	80,0	69,4	87%
2006	55,0	43,0	78%
2007	86,0	69,1	80%
2008	97,2	83,7	86%
2009	91,6	77,3	84%
2010	90,7	82,9	91%
2011	81,7	74,5	91%
2012	79,3	75,1	95%
2013 *	47,0	41,0	87%

The two Breton companies (Doux and Tilly-Sabco) were the main beneficiaries of this windfall. Export refunds are in no way aid intended to support the restructuring of an individual company affected by a competitiveness problem and the strategic choices of its managers who have been warned for a long time “, we underline at the European Commission.

Export refunds: another mechanism

It is also specified that export refunds are “ a market management tool linked to the Common Agricultural Policy, the triggering and amount of which are calculated according to market conditions ". They are not “in no case is aid intended to support the restructuring of an individual company affected by a competitiveness problem and the strategic choices of its managers who have been warned for a long time”.

With high prices at European level, a significant reduction in the cost of cereals and solid consumption, it was no longer possible to continue paying these refunds. Furthermore, the European Parliament and the Council decided, as part of the reform of the Common Agricultural Policy adopted in June 2013, to limit the use of this tool to market crises.

All is not lost !

The abolition of direct aid does not mean the end of all European aid. " Other mechanisms, created as part of the reform of the Common Agricultural Policy adopted last June, (allow) to implement a specific recovery plan for a sector affected by a competitiveness problem and preserve jobs ».

It is still necessary for this to have a sustainable economic strategy”. There is no question of financing exports, explains a European expert to Ouest-France. Corn " we can very well finance energy savings or improve the competitiveness of the production chain ". Any improvements that Tilly-Sabco may require. According to several sources, these buildings are considered " very energy intensive ". And Brussels is putting the finishing touches to a project to ensure the promotion of European products abroad.

The trend is good

« There's every reason to be optimistic in agriculture underlines our European expert. " There is an emerging class in the world that wants to eat 'made in Europe' », therefore made in France. Export markets would thus be growing rather than declining. And the crisis experienced by the two Breton companies therefore seems more linked to the economic situation – or a lack of forecasts from the company's managers - than to a real structural crisis as agriculture has experienced in the past.

Nicolas GROS-VERHEYDE (in Brussels) for West France

NB: Following a request from the French authorities and employees of the Tilly-Sabco company, the European Commission indicated today that it was ready to receive the French Minister with stakeholders in the major French export poultry sector. Commissioner Dacian Cioloş plans to hold this meeting on November 22.