Brussels, Jan 28 - France has broken the European Union's strict national subsidy rules by paying more than 330 million euros ($437.4 million) to its fruit and vegetable sector over 10 years, the EU's executive Commission said on Wednesday.
Commission agriculture experts started their investigation into the French state aid in 2005, which was paid to various producer organisations to help them support market prices and income.
"The Commission concludes that the aids in question cannot benefit from an exemption ... and that they are incompatible with the common market. France should therefore proceed to recover the money," the EU executive said in a statement.
France paid the cash between 1992 and 2002 to ease a glut of fruit and vegetables on the domestic market by supporting prices, paying for temporary stocking, funding product destruction and giving aid for processing, it said.
Paris may also have subsidised sales of fruit and vegetables outside the EU at times of crisis, the Commission said, adding that Brussels authorities had not been notified about any of the state aid under investigation. It said all this had favoured France's fruit and vegetable production to the detriment of that of other EU countries, effectively creating a national market policy superimposed over the EU's own market policy -- and also interfering with it.
France's agriculture ministry said it had yet to be formally notified of the Commission's findings but would probably appeal.
"Based on an in-depth analysis of the official (Commission) notification ... we will envisage filing an appeal to the European Court of Justice," a ministry official said.