Commission finds Estonian state aid to agricultural company Tartu Agro AS to be incompatible state aid

The European Commission has concluded that by renting agricultural land at a rate below market price to Tartu Agro AS, an Estonian private company producing among other things milk, meat and cereals, Estonia granted support not in line with EU State aid rules. Estonia must now recover the incompatible State aid, including interest, from the beneficiary.

In 2017, following a complaint by a competitor, the Commission opened an in-depth investigation to establish whether a land lease contract between the Estonian Ministry of Rural Affairs and Tartu Agro AS was in line with EU State aid rules. The lease contract was signed in 2000 with Tartu Agro AS for a duration of 25 years and is therefore still in force. The Commission found that the lease of land involved State aid, as the lease fee paid by Tartu Agro AS was below the market price. On this basis, in January 2020, the Commission concluded that the lease contract gives an undue and selective advantage to Tartu Agro AS over its competitors, and ordered Estonia to recover the incompatible aid.

Following the General Court’s judgment, the Commission reopened its investigation into the Estonian support to Tartu Agro AS, taking into account the judgment’s findings. With today’s decision, the Commission confirms that Tartu Agro AS received incompatible aid from Estonia through the rent of agricultural land at a rate below market price, until the end of 2019, after which Estonia increased the lease fee in order to enforce the first Commission decision.

Executive Vice-President Margrethe Vestager (pictured), in charge of competition policy, said: “Our investigation has shown that Estonia provided agricultural land to Tartu Agro AS at a rate below market levels, which entails State aid. It is important to ensure a level playing field across the agricultural sector. Therefore, Estonia must now recover the incompatible aid to restore fair competition.”

A press release is available online.

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