Alcoa in 'unlawful state aid' legal battle

The European Commission declared yesterday it was taking legal action against Italy after it failed to claw back €295m in “unlawful state aid”​ given to aluminium giant, which supplies sheet and foil material to the metal packaging sector for cans, bottles and food containers.

Brussels declared in 2009 that €295m handed over by Italy to Alcoa Trasformazioni since 2006 in the form of a preferential electricity tariff was unlawful and distorted competition

Yesterday, the Commission said it had referred the case to the European Court of Justice as Rome had yet to recover the money in breach of its EU obligations. Italy granted the cash to Alcoa’s smelters in Veneto and Sardinia.

"To remedy the distortion of competition caused by an unlawful state subsidy, it is extremely important that the aid is recovered from the beneficiaries without delay​", said Commission vice president in charge of competition policy Joaquín Almunia.

Appeal​

Alcoa said an appeal had been lodged against the original EC decision and that it believed the aid package was legitimate.

“We believe the power tariff was not incompatible aid and it did not distort competition,”​ company spokesman Jasper van Zon told FoodProductionDaily.com. “We are confident that the courts will recognize this and will reverse the Commission’s decision.”​

The Commission said that even though the company had appealed against its decision and asked for interim measures, this did not excuse Italy from its obligation to recover the aid. In July 2010, the General Court dismissed Alcoa's action for interim measures but Alcoa has also appealed this ruling.

Van Zon declined to speculate on whether Alcoa’s supply of aluminium into the packaging sector would be affected if the company was eventually obliged to repay the €295m to Italy.