Commission opens in-depth state aid investigation into Croatian support to wood companies

The European Commission has opened an in-depth investigation to assess whether public support that Croatia has allegedly granted to Hrvatske Šume d.o.o. (‘HŠ') and certain Croatian wood processing companies is in line with EU state aid rules.

The support has been allegedly granted through: (i) the absence of remuneration by HŠ to the Croatian State in exchange for the exclusive rights to manage and commercially exploit the Croatian public forest; and (ii) the non-market conform prices offered by HŠ to certain Croatian wood processing companies that have signed contracts with HŠ for the purchase of wood.

Based on its preliminary assessment, with regards to the exclusive rights to commercially exploit the public forest granted to HŠ, the Commission has doubts as to whether the absence of remuneration might confer an economic advantage to HŠ as compared to private forest owners that need to buy or lease the forest to compete with HŠ. Similarly, in respect of the non-market conform prices offered to certain Croatian wood processing companies, the Commission has doubts as to whether they are autonomous commercial decisions of an independent company (HŠ), or rather decisions of the Croatian State, resulting in an economic advantage to a selected group of customers of HŠ. The Commission will now investigate further to determine whether any of these initial concerns is confirmed.

A press release is available online.

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