On 20 September, the court overturned a 2013 European Commission (EC) Regulation scrapping refunds for exporters wanting protection against big differences between EU prices and prices in non-EU markets.
However, the result does not represent a victory for major poultry firms Tilly-Sabco and Doux, the key beneficiaries of the export refund system. They appealed against the original ruling, but were dealt a blow when the European General Court quashed that appeal.
The companies launched a further appeal to the ECJ, under Article 263 of the Treaty on the Functioning of the EU. The ECJ has now ruled in their favour on the basis that the EC had not followed proper procedure in implementing the 2013 Regulation.
The payments particularly helped insulate them against price volatility as they exported frozen poultry to the Middle East, where demand is strong for the lean protein source.
The EU began reducing the export refunds, which applied to three types of frozen poultry, from €0.4 per kilogramme (kg) in 2010, to zero in July 2013.
“By today’s judgment, the Court upholds Tilly-Sabco’s appeal and annuls the Commission’s implementing regulation on the basis of a procedural defect,” stated the ECJ in its judgment earlier this week.
“The Court concludes that the Commission committed a procedural error, which the General Court failed to raise in its judgment, and for that reason it sets aside the judgment and annuls the Commission’s implementing regulation.”
However, it stated that its decision did not reinstate the export refunds. “…The Court maintains the effects of the contested regulation until the entry into force of a new act.”
Tilly-Sabco and Doux continue to export poultry to the Middle East without the cushion of refunds.