(CN) - The European Commission did not make a mistake when it set the export refund amount for frozen chicken products at zero, the EU's general court ruled Thursday.
Under EU agricultural law, the difference in prices for farm products on the world market and prices in the European Union may be covered by export refunds. The refund amounts are set by the European Commission, which gradually reduced the export refunds for three categories of frozen chicken from 40 euro cents per kilogram to zero in 2013.
France and two poultry companies balked at the move, and petitioned the European General Court to overturn the commission's decision.
After determining the two companies had standing to pursue the action, the EU's lower court ruled in opinions not made available in English that the commission did not make "a manifest error of assessment" in dropping the export refund amount to zero.
The court noted that the commission's findings of high poultry prices, better-than-average profit margins for producers and increased worldwide demand for European chicken justified its decision that the EU poultry market was stable and the export refund should be eliminated.
Furthermore, the court said the commission does not have an obligation to consider the financial conditions of individual companies when making a decision that affects the whole EU market.
The court said the purpose of the export refund is not to subsidize producers that are in financial trouble, but rather to stabilize the whole EU market by allowing the EU to sell its surplus to nations outside Europe.
In this case, a stable EU poultry market justified the commission's decision that the export refunds weren't necessary to sell the surplus, the court concluded.
France and the two poultry producers have two months to appeal the lower court's ruling to the European Court of Justice.
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