European Commission approves State aid for Irish beef sector

On 25 August 2020, the European Commission approved Ireland's plan to provide €50m worth of State aid to the Irish beef sector to address the impact of COVID-19.

The aid has been authorised under Article 107(3)(b) of the Treaty on the Functioning of the European Union – this provision allows aid to "remedy a serious disturbance in the economy of a Member State". Moreover, the European Commission found that the scheme was in line with its Temporary Framework on State Aid – this is the "rule book" for COVID-19 State aid.

The aid will be available to farmers and companies active in the beef sector in Ireland

It is expected that the aid will take the form of direct grants rather than, for example, loan guarantees. It should address the liquidity shortages and difficulties the sector suffered due to the market disturbance caused by outbreak of COVID-19.

There are conditions to the granting of the aid including:

  • the aid does not exceed €100,000 for each beneficiary -  a limit provided by the European Commission's Temporary Framework for undertakings in the primary agricultural sector
  • the scheme will run until 31 December 2020

This decision represents a further example of Ireland notifying to the European Commission, in recent times, sector-specific measures. For example, on 14 August 2020, the European Commission approved Irish State aid for an Adaptation Fund for the Re-opening of Tourism and Hospitality Businesses. These more specific measures differ from the earlier general measures notified by Ireland such as the Repayable Advances Scheme approved on 30 March 2020 or the Sustaining Enterprise Scheme approved on 21 April 2020. 

No doubt, there will be further measures to come and it may well be that the European Commission will have to extend the 31 December 2020 deadline generally for various State aid projects across the EU. Watch this space.

For more information on this topic please contact Dr Vincent Power, Partner or any member of A&L Goodbody's EU, Competition & Procurement team.

Date published: 26 August 2020