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26.5.2012 Official
Journal
of
the
European
Union L
139/1
II
(Non-legislative acts)
DECISIONS
COMMISSION DECISION
of 29 June 2011
on State aid SA.14554 (C 7/04) implemented by Germany for the Gesellschaft für Weinabsatz (Wine
Marketing Company)
(notified under document C(2011) 4426)
(Only the German text is authentic)
(2012/268/EU)
THE EUROPEAN COMMISSION,
had decided to initiate the procedure laid down in
Article 108(2) of the Treaty on the Functioning of the
European Union in respect of the aid.
Having regard to the Treaty on the Functioning of the European
Union, and in particular the first subparagraph of
Article 108(2) ( 1 ) thereof,
(4) The
Commission
decision
to
initiate
the
procedure
was
published in the Official Journal of the European Union ( 3 ).
The Commission invited interested parties to submit their
Having called on interested parties to submit their comments
comments on the aid.
pursuant to the provision cited above ( 2 ),
(5) The
Commission
received
no
comments
from
interested
Whereas:
parties ( 4 ).
I. PROCEDURE
(6) Germany
submitted
comments
to
the
Commission
by
letter of 18 March 2004, registered as received on
(1) Following
a
complaint
received
on
10
May
2001
the
23 March 2004. Further comments were submitted by
Commission sent a written inquiry to the Federal
letter of 10 January 2006, registered on 10 January
Republic of Germany on 9 November 2001. The
2006, and by letter of 13 July 2007, registered on
measure was notified by letter of 5 March 2002,
16 July 2007.
received on 8 March 2002, in response to this inquiry
of the Commission. Since the measure had at that time
already been implemented, it was listed among aid
schemes not notified (aid NN 159/02).
(7) By
letter
dated
21
October
2008,
SG-Greffe
(2008)

D/206430, the Commission informed Germany that it
had decided to extend the procedure which had been
initiated under Article 108(2) of the TFEU in respect of
(2) Germany
sent
additional
information
by
letter
dated
the aid.
20 November 2002, received on 25 November 2002,
by letter dated 28 April 2003, received on 2 May
2003, by letter dated 27 May 2003, received on
28 May 2003, and by fax dated 2 October 2003.
(8) The
Commission
decision
to
extend
the
procedure
was

published in the Official Journal of the European Union ( 5 ).
The Commission called on interested parties to submit
their comments on the aid.
(3) By
letter
dated
19
February
2004,
SG-Greffe
(2004)
D/200645, the Commission informed Germany that it
(9) The
Commission
received
no
comments
from
interested
( 1 ) With effect from 1 December 2009, Articles 87 and 88 of the EC
parties.
Treaty have become Articles 107 and 108, respectively, of the TFEU.
The two sets of provisions are, in substance, identical. For the
purposes of this Decision, references to Articles 107 and 108 of
( 3 ) OJ C 69, 19.3.2004, p. 11.
the TFEU should be understood as references to Articles 87 and 88,
( 4 ) The complainant sent reminding letters to the Commission, but did
respectively, of the EC Treaty where appropriate.
not submit additional formal comments.
( 2 ) OJ C 69, 19.3.2004, p. 11 and OJ C 329, 24.12.2008, p. 18.
( 5 ) OJ C 329, 24.12.2008, p. 18.

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L 139/2
EN
Official Journal of the European Union
26.5.2012
(10) Germany
submitted
(after
a
request
for
delay
extension
of
grape spirit and brandy. GfW also provided services for
17 November 2008, accepted by the Commission on
winegrowing enterprises in connection with distillation
21 November 2008) comments to the Commission by
measures (Destillationsmanahmen). These distillation
letter of 23 December 2008, registered on 5 January
measures involved the measures covered by the
2009.
common market organisation ( 6 ) and state-funded distil
lation normally carried out on the basis of Council deci
sions ( 7 ). In connection to this GfW advised small wine
II.
producers and organised the transport of wine to the
DETAILED DESCRIPTION OF THE AID
distilleries.
II.1. Title of the measure
(11) Kredit
an
die
Gesellschaft
für
Weinabsatz
mit
nachfolgendem
(17) Other
possible
beneficiaries
are
the
winegrowing
enter
Forderungsverzicht [loan to the Gesellschaft für Weinabsatz
prises and merchants from whom, as a result of the loan,
(wine marketing company) and subsequent waiver of
GfW was placed in a position to buy must and who did
claims]
not waive any of their claims on GfW when WAK
decided to do so at the time GfW got into financial
difficulty.
II.2. Legal basis
(12) The measure was implemented on the basis of a
contractual agreement between the Wiederaufbaukasse der
II.6. Background of the aid
rheinland-pflzischen Weinbaugebiete (reconstruction fund
(18) In
1999,
using
a
loan
of
EUR
15
302
696,25
from
WAK
for the Rhineland-Palatinate winegrowing areas, WAK)
and its own resources, GfW purchased 44 million litres
and the Gesellschaft für Weinabsatz Pfalz GmbH (Palatinate
of must. 60 % of this must had a minimum of 60 degree
wine marketing company, GfW).
Oechsle and an average of 81 degree Oechsle. 40 % of
the must was ordinary table wine must with a minimum
of 44 degree Oechsle which was bought to take
II.3. Objective
advantage of the beneficial conditions of preventive distil
lation. An average price of EUR 0,38 per litre was paid
(13) The objective was to grant a loan to GfW to purchase
for all the must purchased. No finished wine was
must from winegrowing enterprises and merchants.
purchased. The purchase was carried out on the basis
Secured assets were agreed as collateral. These assets
of simple, extended or prolonged retention of title (ein
were also subject to varying degrees of retention of
fache, erweiterte, verlngerte Eigentumsvorbehalte) by the
title (Eigentumsvorbehalt) by the winegrowing enterprises
winegrowing enterprises and merchants. At the same
and merchants (Weinbaugetriebe und Kommissionre) in the
time these secured assets were agreed as collateral for
form of simple, extended or prolonged retention of title.
WAK.
The waiver of claims took place when GfW got into
financial difficulty due to a slump in market prices.
(19) According
to
the
information
submitted
by
Germany,
GfW’s business plan was to take advantage of the distil
II.4. Public body
lation opportunities in accordance with Regulation (EEC)
No 822/87 for 40 % of the must and process 60 % of
(14) WAK
is
a
public-law
corporation
of
the
federal
state
of
the must into raw wine for the production of sparkling
Rhineland-Palatinate registered in Mainz. It operates in
wine and to sell it to sparkling wine producers. In
the winegrowing sector in a similar manner as a bank.
addition, GfW were planning to stock 20 % of the raw
WAK’s customary trade is the granting of loans for land
wine for nine months to one year in order to take
reparcelling (Flurbereinigung). WAK is financed from
advantage of EU subsidies for stocking of wine in
contributions, fees, loans and grants (Article 8(1) of the
accordance with Regulation (EEC) No 822/87, before it
Weinbergsaufbaugesetz [winegrowing enterprise devel
would be sold on the market for raw wine for the
opment act]).
production of sparkling wine.
II.5. Beneficiaries
(20) On
11
November
1999
the
winegrowing
enterprises
and
merchants received a down payment of 80 % of the
(15) Beneficiary of the measure was GfW, which was granted
purchase price. A down payment of EUR 0,31 per litre
a loan by WAK on terms which were not in conformity
was paid on average.
with market conditions.
( 6 ) Council Regulation (EEC) No 822/87 of 16 March 1987 on the
common organization of the market in wine (OJ L 84, 27.3.1987,
(16) GfW
was
a
wholly-owned
subsidiary
of
the Bauern- und
p. 1), as of 1 August 2000 Council Regulation (EC) No 1493/1999
Winzerverband Rheinland-Pfalz Süd (southern Rhineland-
of 17 May 1999 on the common organisation of the market in
Palatinate farmers’ and winegrowing enterprises’ associ
wine (OJ L 179, 14.7.1999, p. 1).
ation). It was founded in 1984 for the purpose of
( 7 ) See, for example, Council Decision 2000/808/EC of 19 December
2000 on the granting of exceptional national aid by the authorities
marketing wine and its trade was the production and
of the Federal Republic of Germany for the distillation of certain
marketing of sparkling wine, grape juice, grape jelly,
wine sector products (OJ L 328, 23.12.2000, p. 49).

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EN
26.5.2012 Official
Journal
of
the
European
Union L
139/3
(21) In
1999,
GfW
sent
40
%
of
its
stocks
to
preventive
(27) According
to
§19
of
the
German
insolvency
law
(Insol
distillation. In view of the fall in prices on the market
venzordnung) liabilities exceeding the assets of a company
for raw wine at the end of 1999 GfW decided not to sell
is cause for opening the insolvency proceedings. Because
any of the raw wine that year but to wait for the market
of this, the Executive board of GfW was under the
to recover in 2000.
obligation in accordance with § 64 GmbHG a.F. i. V.
m. § 19 InsO, to within three weeks of entering into
the state of its liabilities exceeding its assets (ber
(22) In
2000,
due
to
the
comparatively
large
harvests
and
schuldung) to apply for the opening of the insolvency
falling sales of sparkling wine the market in white wine
proceedings.
slumped even further (average prices falling in some
instances by as much as EUR 0,20). Much of the cask
wine still in storage had to be sent for another round of
(28) As a result of the impending insolvency, GfW asked
distillation.
some creditors (WAK, the winegrowing enterprises and
around 130 merchants involved in the purchase
described in recital 18) to waive part of their outstanding
(23) As a result of an amendment of the common organi
claims to enable the company to continue trading. In the
sation of the market in wine adopted in 1999 and
case of the winegrowing enterprises and merchants, the
entered into force on 1 August 2000, preventive distil
waiver was to cover 90 % of their outstanding claims,
lation in accordance with Regulation (EEC) No 822/87
meaning they would only receive an additional 2 % of
was replaced by distillation to supply the potable alcohol
the agreed purchase price. The remaining deficit was to
market in accordance with Regulation (EC) No
be eliminated by the necessary subordination of claims
1493/1999. The terms were considerably poorer, and
and waiver of claims by WAK.
only around half the previous price of EUR 0,50-0,55
per litre for preventive distillation could be achieved.
(29) As
principle
creditor
(see
table
1)
with
a
weaker
security
position, WAK had a considerable interest in avoiding
(24) Following on the slump in prices in 2000 it proved
the impending insolvency. It therefore tried to convince
impossible for GfW to achieve the expected profits
the winegrowing enterprises and merchants to agree to
neither on the wine market nor in distillation to
waive a part of their claims. WAK also signed a written
supply the potable alcohol market. As a result, the
agreement with GfW, dated 4 December 2000, where it
book value of GfW’s stocks had to be reduced signifi
agrees to subordinate a part of its outstanding claims —
cantly and as a result, GfW’s liabilities exceeded its assets.
corresponding to GfW’s deficit — in favour of the other
creditors. The final amount of the subordination of
claims was only to be specified once the waiver of
(25) In
view
of
the
commercial
problems
described
above,
an
claims declarations of the winegrowing enterprises and
interim statement of account was drawn up for the year
merchants had been received, so as to minimise the
until 31 October 2000 and examined by an auditor. On
amount subordinated. It was also agreed that WAK
31 October 2000 GfW’s liabilities (EUR 15 670 155)
would, if it would prove necessary at a later stage to
exceeded its current assets (EUR 9 886 856) with EUR
avoid insolvency proceedings, waive the same amount
5 783 299 and GfW had the liabilities as expressed in
of claims as it had subordinated.
the table below. According to a report prepared by
Wirtschaftsprüfungsgesellschaft Falk & Co. GmbH, GfW
would very soon be facing insolvency proceedings due to
(30) 1 700 out of the 2 700 winegrowing enterprises and
its liabilities exceeding its assets (berschuldung) if nothing
merchants declared their willingness to waive 90 % of
was done to avoid this.
their remaining claims, corresponding to around 60 %
of the outstanding claims of the group as a whole.
However, the remaining winegrowing enterprises and
(26) Table
1
merchants either specifically refused the offer or did
not answer the request. It was clear that some of them
(EUR)
decided not to waive their claims because of their
Liabilities to Amount
stronger security position — some had prolonged
retention of title and had already received down
WAK 10
150
959
payment of 80 % of the agreed price. This meant that
their returns in case of insolvency proceedings would be
Financial institutions 726
892
higher than the 2 % of the agreed purchase price which
was on offer.
Suppliers 218
460
Winegrowing enterprises and merchants 4
355
581
(31) In
addition,
a
number
of
the
winegrowing
enterprises
and merchants had handed in complaints against GfW
Other 218
263
and these complaints had been treated by the court who
proposed settlements agreements. According to the
Total 15
670
155
settlement agreements GfW should pay 70 % of the
remaining claims and 30 % should be waived. The

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L 139/4
EN
Official Journal of the European Union
26.5.2012
court also decided that GfW would have to carry 80 % of
payments had been made. After winding-up GfW’s
the court fees. Similar settlement agreements were
remaining assets (EUR 87 079,79), WAK’s remaining
proposed by other courts and, with this in mind, it
outstanding claims of around EUR 313 000 were
was no longer possible for GfW to expect that the
declared irrecoverable and were written off. The part of
other winegrowing enterprises and merchants would
the loan that was never repaid therefore totalled EUR
agree to waiving 90 % of their remaining claims. In
5 318 441,60 (the original waiver of claims of EUR
addition, several winegrowing enterprises and
5 005 441,60 plus the outstanding claims after liqui
merchants now declared that they would demand
dation of EUR 313 000).
100 % repayment of the remaining 20 %.
II.7. Nature and intensity of the aid
(32) § 305a of the German insolvency law states that an out
of court settlement (auergerichtliche Einigung) to avoid
(38) WAK’s
EUR
15
302
696,25
loan
to
GfW
was
granted
in
settlement of debts fails when one single creditor
several instalments in 1999 for a term of 12 to 18
decides to proceed to enforcement after the out of
months:
court settlement negotiations have started.
(EUR)
(33) Therefore,
contrary
to
its
original
intention,
GfW
could
11.11.1999 5
936
061,62
no longer ask the winegrowing enterprises and
merchants to waive any of their claims. Instead, GfW
25.11.1999 6
868
777,04
signed an agreement with WAK dated 21 February
2001 stating that WAK agrees to fully cover GfW’s
deficit of year 2000 by waiving EUR 5 005 441,60 of
1.12.1999 585
429,72
its claims. On the remaining debt for the time period of
1 January 2001 to 31 December 2001, no interest
13.12.1999 112
110,66
would be charged. The agreement also stated that the
winegrowing enterprises and merchants remaining
17.12.1999 1
800
317,21
claims would be settled in full. This way, the security
of WAK’s non-subordinated claims was guaranteed, the
Total 15
302
696,25
deficit situation was remedied, insolvency proceedings
were avoided for the time being and GfW could
continue trading.
(39) The
interest
rates
charged
was
as
follows:
(34) During
the
period
of
1
November
2000
to
31
December
2000 GfW made repayments to WAK on the loan at a
value of EUR 1 440 446,92. During the period of 2001-
4th quarter 1999 3,28
%
2005 GfW continued trading and made regular
repayments on its loan to WAK, totalling EUR
1st quarter 2000 3,51
%
3 728 969,40. In addition, during 2001, GfW made
interest payments totalling EUR 149 757,16 to WAK.
2nd quarter 2000 4,15
%
3rd quarter 2000 4,80
%
(35) Due to a decline in turnover in GfW’s regular fields of
business as well as insufficient capitalisation, GfW had by
4th quarter 2000 5,15
%
31 December 2004 decided to cease all activity and to
liquidate GfW. All remaining stock of the remaining
business areas was sold. All the proceeds were used to
2001 4,55
%-5,25
%
repay WAK. It was agreed with the buyer (a private
person) that the value of all the stock remaining
according to the inventory list on 31 December 2004
would be transferred to WAK at the end of 2005. The
value would be the original purchase value of EUR
(40) On
11
November
1999
the
suppliers
received
a
down
79 579,79.
payment of 80 % of the agreed price. In addition, as a

result of the prolonged retention of title awarded some
of the suppliers, which would not come to an end on
processing, blending or mixing, part of the stock was
(36) GfW was eventually dissolved as of 1 June 2005 and
used to secure these suppliers’ remaining claim of
deleted from the trade registry during the course of
20 %. The stocks were also agreed as collateral for
2006. There is neither a legal successor nor any legal
WAK. However, due to the retention of title WAK had
entity from which the aid could be recovered.
only a secondary claim on part of the stock as long as
the claims with prolonged retention of title were not
settled. The larger share of the risk of fluctuations in
(37) By
31
December
2005
EUR
9
897
154,65
of
the
loan
prices consequently lay with GfW and its creditors of
had been repaid and EUR 793 994,99 in interest
which WAK was the main one.

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EN
26.5.2012 Official
Journal
of
the
European
Union L
139/5
(41) On
the
loan
granted
by
WAK
to
GfW
only
limited
(48) The
private
creditor
test
assesses
whether,
under
the
same
interest was paid: from 11 November 1999 to
market conditions, a private creditor would have acted or
31 December 1999 (at a rate of 3,28
%), from
has acted in the same way as the public creditor. As
1 January 2000 to 31 December 2000 (3,51-5,15 %)
regards the case at hand, private creditors had claims
and from 1 January 2001 to 31 December 2001
on GfW totalling EUR 5,5 million on 31 October
(4,55-5,25 %). No further interest was claimed after
2000, but none of them waived their claims. The
31 December 2001.
report by an independent auditor did appear to show
that it made economic sense for WAK to subordinate
and waive a share of their claims, but did not explain
(42) Considering
the
risk
that
WAK
took
when
lending
the
why none of the other creditors were prepared to waive
money to GfW, a substantial risk premium should have
their own claims.
been charged on top of the regular interest rate. As there
was no such risk premium added to the interest rate an
aid element was present at the time of granting of the
loan. This aid element can be calculated as the difference
(49) In the opening of the formal investigation procedure the
between the interest rate charged and the market interest
Commission concluded that at the time of the opening
rate plus the risk premium which should have been
of procedure, it could not be excluded that WAK’s
charged.
subordination and waiver of claims (the loan to GfW
and future interest payments on this loan) were not in
accordance with the private creditor test as they seemed
(43) According to the Commission notice on the method for
to be higher than absolutely necessary and excessively
setting the reference and discount rates (
favoured not only GfW but also the other creditors (pri

8 ) as amended by
Commission notice on technical adaptation to the
marily the winegrowing enterprises and merchants) who
method for setting the reference and discount rates (
had their claims refunded in full.

9 ),
applicable for the period in question, the base reference
rate for Germany lay between 5,23 % and 6,33 %.
According to the notice, the reference rate determined
is a floor rate which may be increased in situations
(50) The
opening
of
the
formal
investigation
procedure
was
involving particular risk (for example, an undertaking
then extended to include the granting of the loan.
in difficulty, or where the security normally required by
Specifically, doubt was expressed concerning whether
banks is not provided). In such cases, the premium may
the granting of the loan was done on market terms
amount to 400 basis points or more if no private bank
(no risk premium was charged) and with sufficient secur
would have agreed to grant the relevant loan.
ities.
(44) According
to
Germany,
interest
rates
charged
by
German
banks during the same period for similar credits lay
(51) In the extension of the formal investigation procedure,
between 5,25 % and 6,50 % (VR-Bank Südliche
doubt regarding possible aid to the winegrowing enter
Winstrasse e.G.) and 5,40 % and 6 % (Die Kreissparkasse
prises and merchants was again raised. The information
Bad Dürkheim).
available at the time seemed to indicate that the price
paid for the must was above the relevant market price,
that the aim of the transaction was not to maximise
II.8. Duration of measure
profits but to support the wine and must market, and
that the security position awarded the winegrowing
(45) One-off
measure.
enterprises and merchants under the sales contract were
more advantageous than under normal circumstances.
II.9. Reasons for initiating the formal investigation
procedure
(52) The doubt regarding the price was emphasised by
(46) The Commission initiated the formal investigation
documents provided by Germany after the first opening
procedure provided for under Article 108(2) of the
of procedure, which showed a fluctuation in the price per
TFEU because it suspected that the subordination and
litre of table wine (not including VAT) in 1999 in the
waiver of claims could constitute State aid in the
Pfalz-Rheinhessen region from a minimum EUR 0,26
meaning of Article 107 of the TFEU.
(October/November) to EUR 0,30 (June to September),
EUR 0,35 (April), and a maximum EUR 1,10 (February,
June, November/December). The minimum market price
(47) In particular, the Commission had, based on the
that could be achieved for table wine at the time of
information available at the time of the initial opening
granting the loan was therefore EUR 0,26 per litre.
of the formal investigation procedure, examined whether
the subordination and waiver of claims were carried out
pursuant to the private creditor test.
(53) The average purchase price of EUR 0,38 per litre
( 8 ) OJ C 273, 9.9.1997, p. 3.
therefore seemed to be above the lowest market price
( 9 ) OJ C 241, 26.8.1999, p. 9.
of around EUR 0,26 per litre.

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L 139/6
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Official Journal of the European Union
26.5.2012
III. COMPLAINTS AND INFORMATION FROM THIRD
were used to repay WAK. It was agreed with the buyer (a
PARTIES
private person) that the value of all the stock remaining
according to the inventory list on 31 December 2004
(54) The
Commission
received
information
indicating
that
the
would be transferred to WAK at the end of 2005. The
above waiver of claims was financed through WAK
value would be the original purchase value of EUR
funds. As the public authority funding WAK, the
79 579,79. GfW was deleted from the trade registry
federal state of Rhineland-Palatinate was said to have
during the course of 2006 and there is neither a legal
examined a possible capital injection due to WAK’s
successor nor any legal entity from which the aid could
reduced capital base, but ultimately decided against it.
be recovered. In accordance with settled case-law ( 10 )
recovery is according to Germany therefore not possible.
(55) The
Commission
received
a
complaint
concerning
the
alleged State aid involved in the waiver of claims by
WAK. The complainant stated that GfW was
(62) Germany
gives
their
assurances
that
GfW’s
granting
of
competing in selling wine distillates and, as a result of
simple, extended or prolonged retention of title to the
the waiver in favour of this company, competitors would
winegrowing enterprises and merchants in connection
have considerable problems selling their own products.
with the sale of must, was in accordance with
The complainant submitted several news paper articles
common business practise. Germany also assures that
with information concerning the waiver of claim by
to accept the secured assets as collateral despite the
WAK to the benefit of GfW.
retention of title as WAK did for the loan to GfW is
also according to common business practice.
(56) The
same
complainant
also
forwarded
a
letter
he
had
received from the public prosecutor’s office in Kaisers
lautern (central economic crime office) as a response to a
(63) Further,
Germany
states
that
the
purchase
of
must
in
letter he had sent there. The letter from the public pros
autumn 1999 by GfW was carried out at the market
ecutor’s office in Kaiserslautern summarises the
price because 60 % of the must bought was quality
information received from the complainant in the form
must (minimum 60 degree Oechsle) and not ordinary
of news paper articles and statements and in the letter
table wine must as assumed in the opening of procedure.
informs the complainant that, based on this information
According to Germany the quality requirements for the
they had received, there are no grounds for opening
production of sparkling wine are higher than the
criminal investigation proceedings (strafrechtliches
requirements for table wine (minimum 60 and 44
Ermittlungsverfahren einzuleiten).
degree Oechsle respectively). The remaining 40 % of the
must was ordinary table wine must and was bought to
take advantage of the beneficial conditions of preventive
IV. COMMENTS FROM INTERESTED PARTIES
distillation.
(57) The
Commission
did
not
receive
any
comments
as
part
of the formal investigation procedures.
(64) In
its
comments,
Germany
emphasises
that
the
marketing
(58) The repeated letters from the complainant after the initial
concept of GfW for 60 % of the stock involved the
opening of procedure did not add any new facts or
purchase of high quality must in large quantities and
arguments.
the subsequent processing into homogenous batches of
raw wine for sparkling wine (Sektgrundwein), in
compliance with the homogeneity and quality
V.
requirements of wineries. Raw wine for the production
COMMENTS FROM GERMANY
of sparkling wine requires a low level of SO2 and high
V.1. Aid element at time of granting of the loan
levels of fruit acids. This could only be achieved if the
must was purchased during the autumn sales period and
(59) Germany
has
provided
comprehensive
information
on
through GfW’s own preparation of the must into raw
the conditions of the loan granted by WAK to GfW
wine.
which has been included in the description of the
measure in section II.
(65) Pursuant
to
the
information
provided
by
Germany,
on
(60) In its comments, Germany agrees that the interest
the market for raw wine for sparkling wine, the basic
charged by WAK for the loan to GfW was lower than
price paid for one litre of must of 60 degrees Oechsle
the market rate. Germany recognises that the difference
was EUR 0,312 per litre. For each additional degree
between the market rate and the interest rate charged
Oechsle (up to a maximum of 80 degrees Oechsle)
constitutes aid to GfW in the meaning of Article 107(1)
EUR 0,005 per litre was paid. The winegrowing enter
of the TFEU.
prises and merchants were paid for their high quality
must, 60 % of the must purchased, in accordance with
this principle.
(61) Germany
also
supplies
proof
of
that
GfW
was
liquidated
and dissolved as of 1 June 2005. All remaining stock of
( 10 ) ECJ, 21.3.1990, Belgium v Commission (Tubemeuse), C-142/87, ECR
the remaining business areas was sold. All the proceeds
I-959.

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EN
26.5.2012 Official
Journal
of
the
European
Union L
139/7
(66) In
this
context
Germany
points
to
the
relevant
market.
In
reasons that GfW could have achieved an average sales
its opinion the market price for ordinary table wine
revenue of EUR 0,44 to EUR 0,46 per litre, much above
cannot be taken as a benchmark for this 60 % of the
the average of EUR 0,38 per litre paid to the wine
stock because the relevant market for GfW is not the
growing enterprises and merchants.
ordinary table wine market but the market for higher
quality raw wine to be used in the production of
sparkling wine. Germany also makes reference to the
(71) The
planning
was
based
on
the
following
assumptions
of
theory of demand substitution which points out that
target prices:
two products are not traded on the same market if
one cannot be replaced by the other even if the price
of one changes. In the case at hand, the specific
requirements for must and raw wine for the production
Volume
Price/litre
(EUR)
of sparkling wine makes it impossible to replace it with
ordinary table wine must or table wine even if the price
Distillation 40
% 0,50-0,55
for table wine would decrease significantly. Therefore, a
EU subsidy for stocking of wine/must
20 % 0,435
decrease in the price of table wine will not influence the
(1 year): EUR 0,06/l and subsequent
price of must for the production of sparkling wine
sale as raw wine for sparkling wine
because they cannot be substituted for one another.
Sale as raw wine for sparkling wine 40
% 0,375
(67) According to the import statistics of the German wine
growers association (Deutsche Weinbauverband) for the
(72) Based
on
these
assumptions
an
average
sales
price
of
years 1998-2001, imported white wine, which due to its
0,44 to 0,46 EUR /l was expected.
high quality is suitable for the production of sparkling
wine, had a market price of EUR 0,38 per litre, signifi
cantly higher than the EUR 0,26 per litre quoted to table
(73) The
above
sales
forecast
results
in
the
following
profit
wine. In its comments, Germany concludes that two
calculation:
separate markets exist, one for ordinary table wine and
table wine must, and another for high quality raw wine
and high quality must to be used for the production of
sparkling wine.
Price/litre (EUR)

Purchase price and processing 0.37-0,38
(68) According
to
Germany
it
should
therefore
be
concluded
Income from sale as raw wine for
0,44-0,46
that the relevant market for the wine not being sent for
sparkling wine, distillation, stocking
distillation is the market for high quality raw wine for
subsidies
the production of sparkling wine, with much higher
achievable prices (EUR 0,38 per litre) and not the
Expected profit 0,06-0,09
ordinary table wine market price (EUR 0,26 per litre).
Germany therefore reasons that the price paid for the
must by GfW was in conformity with the market price
of the relevant market and included a normal profit
(74) Based
on
a
total
volume
of
some
44
million
litres,
a
total
margin.
profit between some EUR 2,64 million and some EUR
3,96 million was expected.
(69) In
addition,
GfW
planned
to
participate
in
EU
stocking
and distillation programmes (GfW had already offered
(75) Germany
also
makes
reference
to
that
the
market
price
such services to winegrowers before). Under the
for table wine quoted by the European Commission in
stocking programme EUR 0,06 per litre was paid for
the opening decisions (EUR 0,26 per litre) is the lowest
20 % of the stocks which should later be sold as raw
quote for November 1999 for table wine. The full quote
wine for sparkling wine production. Under the distil
for November 1999 is a market price for table wine
lation programme EUR 0,50-0,55 per litre was paid for
between EUR 0,26 and EUR 0,56 per litre. In addition,
the 40 % of the stock sent for distillation.
this was the full spread for entire 1999. For 2000 the
spread lay between EUR 0,20 and EUR 0,41 per litre.
Germany also emphasises that 60 % of the must bought
by GfW had an average degree of Oechsle of 81, much
(70) In
the
opinion
of
Germany
it
was
possible
to
make
a
higher than the requirement for table wine of 44 and this
profit from these activities when WAK granted the loan
was of course reflected in the price GfW paid for the
to GfW. On the one hand, GfW intended to use 40 % of
must.
the must purchases for preventive distillation in
December 1999 at a distillation price considerably
higher than the purchase price (EUR 0,50-0,55 per
V.2. Aid element at time of subordination of claims
litre). On the other, it was predicted that sparkling
and waiver of claims
wine producers would pay relatively good prices
(between EUR 0,36 and EUR 0,41 per litre) for large
(76) According
to
Germany,
it
was
established
that
GfW
was
lots of uniform, guaranteed quality raw wine. Germany
facing insolvency after an interim statement of accounts

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L 139/8
EN
Official Journal of the European Union
26.5.2012
was drawn up in November 2000. GfW then had an
complaints were treated by the court who proposed
account deficit of some EUR 6 million which was
settlement agreements. According to the settlement
confirmed when the annual accounts were drawing up
agreements GfW should pay 70 % of the remaining
for 2000. The reasons for the deficit was that the value
claims and 30 % should be waived. The court also
of the stock still in GfW possession had fallen following
decided that GfW would have to carry 80 % of the
a significant slump in market prices which meant that
court fees. Similar settlement agreements were proposed
GfW would only be able to sell their stock at a lower
by other courts. With this in mind, it was no longer
price than first predicted.
possible for GfW to expect that the winegrowing enter
prises and merchants would agree to waiving 90 % of
their remaining claims. In addition, several winegrowing
enterprises and merchants now declared that they would
demand 100 % repayment of the remaining 20 %. The
(77) According
to
the
information
submitted
by
Germany,
on
fact that 1 700 out of 2 700 winegrowing enterprises
31 October 2000, WAK still had claims of some EUR
and merchants had already indicated that they would
10 million towards GfW. As collateral WAK had GfW’s
be willing to waive a share of their claims was no
secured assets, valued at EUR 5,7 million at the same
longer of relevance as § 305a of the German insolvency
moment in time. These were subject to retention of
law states that an out of court settlement (auergerichtliche
title (simple, extended or prolonged) by the winegrowing
Einigung) to avoid insolvency proceedings fails when one
enterprises and merchants which according to Germany
single creditor decides to proceed to enforcement after
would give them priority in case of insolvency. So
the out of court settlement negotiations have started.
according to Germany, in case of insolvency procedure,
GfW would need to settle the payment to the wine
growing enterprises and merchants, at a value of
around EUR 3,5 million, before payments to any other
creditor could be made.
(81) On
21
February
2001
WAK
therefore
agreed
with
GfW
to cover the deficit of year 2000 by waiving EUR
5 005 441,60 of its claims, that no interest would be
charged on the remaining debt for the time period of
1 January 2001 to 31 December 2001 and that the
(78) In
order
to
remedy
the
deficit
situation
in
time
and
avoid
claims of the winegrowing enterprises and merchants
the opening of the insolvency proceedings in accordance
would be settled in full. The security of the non-
with § 64 GmbHG a.F. i. V. m. § 19 InsO, immediate
subordinated claims was guaranteed. GfW’s deficit
action was needed.
situation was remedied, insolvency proceedings were
avoided and GfW could continue trading.
(79) Germany
points
out
that,
as
principle
creditor
with
a
weaker security position, WAK had a considerable
(82) Germany
claims
that
the
subordination
and
the
waiver
of
interest in avoiding the impending insolvency. It
claims are both in accordance with the private creditor
therefore tried to convince the winegrowing enterprises
test. To support this claim, Germany refers to relevant
and merchants to waive part of their claims and also
case-law.
agreed to the following with GfW on 4 December 2000:
(83) Waiving
part
of
the
claim
can
be
required
in
order
to
— a subordination of claims of the same amount as the
increase the amount which is effectively recovered ( 11 ). A
deficit after the winegrowing enterprises and
private creditor would act so as to minimise his losses. In
merchants had agreed to waive 90 % of their
case a claim was not sufficiently secured, agreement to
remaining claims,
postpone the repayment would increase the chances of
repayment without losses as the debtor would have the
chance to overcome the crisis and improve its situ
ation ( 12 ). In the HAMSA judgment of the CFI, the
— to, but only if necessary, waive the amount of claim
court rejects the Commissions previous practice of
they had agreed to subordinate.
requiring equal share of waivers of claims for private

and public creditors in relation to their share of the
debt. Instead the court established that the private
creditor test can be applied also when the waivers rela
tionship between the different creditors is asymmetric.
(80) Despite
a
successful
start
to
the
negotiations
with
a
The CFI emphasises that the creditor’s status as the
majority of the winegrowing enterprises and merchants
holder of a secured, preferential or ordinary claim, i.e.
agreeing to waive their claims, GfW eventually failed due
the rank of the securities of the different creditors, is
to concerted actions by some of the winegrowing enter
decisive. The CFI established that a public creditor acts
prises and merchants and their lawyers. They were not
like a private creditor when he decides to waive a share
willing to waive their claims because of their preferential
security position as a result of their extended or
( 11 ) ECJ, 29.4.1999, Spain v Commission, C-342/96, ECR I-2459.
prolonged retention of title and filled complaints. These
( 12 ) ECJ, 22.11.2007, Spain v Lenzing, C525/04, ECR I-9947.

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EN
26.5.2012 Official
Journal
of
the
European
Union L
139/9
of his claims, after extensive and reasonable evaluation of
report comes to the conclusion that it made economic
how much he might be able to recover, of the risk of
sense for WAK to subordinate their claims, waive part of
liquidation and of the chance of the firm being restored
their claims to the abovementioned amount and to waive
to viability ( 13 ). Lastly, Germany refers to the Commis
the future interest payments. The reasons for this
sion’s decision in the Huta Cynku case, where the
conclusion were submitted by Germany and are as
Commission decided that no advantage and thus no
follows:
State aid exists where restructuring would yield better
proceeds than liquidation ( 14 ).
— If WAK had not subordinated and waived its claims
and interest payments GfW would have had to apply
for insolvency and GfW would have been wound up.
(84) On
these grounds Germany argues that taking into
WAK’s claims would have had to be met from the
consideration WAK’s position as the main creditor and
sale of GfW’s stocks.
its weaker security position compared to the wine
growing enterprises and merchants, both the subordi
nation as well as the waiver of claim was in accordance
with the private creditor test and do not constitute State
— If the company had been wound up the value of
aid. In an insolvency procedure WAK would have lost at
GfW’s stocks would have fallen. The actual
least the same and most probably a significantly larger
proceeds from the sale of the stocks would have
amount of their remaining claim.
been only about 50 % to 70 % of the book value.
Therefore, allowing for security rights, the proceeds
would have amounted to between EUR 1,84 million
and EUR 2,4 million.
(85) Only
through avoiding the insolvency of GfW and
settling the winegrowing enterprises and merchants
remaining claims did WAK have full security rights to
— Insolvency proceedings are costly.
the remaining stock and could secure a higher repayment
on its remaining claims than what would be realised in
case of insolvency.
— The German Insolvency Law (‘InsO’) provides for a
right to separation for products with retention of
title; however, this is determined on the basis of
the insolvency administrator’s option to choose
(86) From
an ex-ante perspective, the behaviour of WAK was,
between performance of the contract and separation
according to Germany, correct, especially as they
of assets (paragraph 103 InsO). Separation of assets is
managed to secure a higher repayment by having
possible only if the insolvency administrator refuses
converted their weak security position into a primary
to perform the contract, in which case the creditor
security right and avoided the impending insolvency of
can withdraw from the contract and demand the
GfW. According to Germany, any private bank would
separation of the assets, and is entitled to compen
have acted in the same way in the same situation.
sation for non-performance of the contract. Down
payments may be offset. In return, GfW can claim
recovery of the payments already made, which may
be offset against the compensation for non-
performance of the contract.
(87) According to the German authorities, an ex-ante
evaluation of GfW accounts would have estimated that
by a continuation of GfW, WAK would have been able
to realise repayments of EUR 5 112 918,81 million. On
the other hand, if GfW had entered into insolvency
— By contrast, after WAK subordinated part of its
proceedings, WAK would only have been able to
claims, it was legally possible for GfW to avoid
realise a repayment of maximum EUR 2,4 million. This
insolvency proceedings and after waiving part of its
leaves a difference of minimum EUR 2,7 million.
claims and interest payments, WAK had outstanding

claims of EUR 5,15 million which it could expect to
recover as a result of the fact that GfW could
continue trading.
(88) This
is
confirmed
by
a
report
from
3
February
2003,
prepared by an independent auditor ( 15 ), commissioned
by WAK and submitted by the German authorities. The
— It is also pointed out that if insolvency proceedings
had been opened the repayments on the loan of EUR
1 440 476,92 made by GfW to WAK in the period
( 13 ) CFI, 11.7.2002, HAMSA v Commission, T-152/99, ECR II-3049.
1 November to 31 December 2000 could have been
( 14 ) Commission decision, 25.9.2007, on State aid C 32/06 (ex N
contested by GfW under the insolvency rules. This
179/06) implemented by Poland for Huta Cynku Miasteczko
lskie SA, 2008/142/EC.
would have led to WAK being obliged to repay
( 15 ) Wirtschaftsprüfungsgesellschaft Falk & Co. GmbH.
these funds.

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L 139/10
EN
Official Journal of the European Union
26.5.2012
(89) Germany
emphasises
that
an ex-post evaluation shows
market open to intra-Union trade
( 17 ). There is a
that the subordination and waiver of claims option
substantial intra-Union trade in agricultural products.
made more economic sense as the repayments received
Therefore, the present aid is liable to affect trade
by avoiding the insolvency of GfW was EUR
between Member States ( 18 ).
4 670 517,65, making it superior to the maximum
EUR 2,4 million which could have been secured under
the insolvency proceedings.
(95) The
Court
has
ruled
that
in
order
to
determine
whether
a
state measure constitutes aid within the meaning of
Article 107(1) of the TFEU, it is also necessary to
(90) Germany concludes that as the subordination and waiver
establish whether the recipient undertaking receives an
of claims was in accordance with the private creditor test,
economic advantage which it would not have obtained
there was no aid to the winegrowing enterprises and
under normal market conditions ( 19 ) and/or whether the
merchants at the time of subordination and waiver of
measure enabled the undertaking to avoid having to bear
claims by WAK.
costs which it would normally have had to meet out of
its own financial resources ( 20 ). This would indeed be
sufficient to indicate potential distortions of competi
tion ( 21 ).
VI. ASSESSMENT OF THE AID
VI.1. Common market organisation
VI.2.1. Existence of aid to the Gesellschaft für Weinabsatz
(91) Until
the
entry
into
force
of
Council
Regulation
(EC)
No
479/2008 of 29 April 2008 on the common organi
(GfW)
sation of the market in wine ( 16 ), winegrowing and
VI.2.1.a. T h e g r a n t i n g o f l o a n b y W A K
wine processing were covered by Regulation (EC) No
1493/1999. Article 71 of Regulation (EC) No
(96) The
WAK
loan
of
EUR
15
302
696,25
was
granted
in
1493/1999 states that Articles 87, 88 and 89 of the
autumn 1999. GfW was charged an interest rate between
Treaty (now Articles 107, 108 and 109 of the TFEU)
3,28 % and 5,25 % over the period of the loan. No risk
shall apply to the production of and trade in the
premium was charged. The reference rate for Germany
products covered by it. Before 31 July 2000, wine
for this period lay between 5,23 % and 6,33 %.
growing and wine processing were covered by Regulation
(EEC) No 822/87. Article 76 of Regulation (EEC) No
822/87 states that Articles 92, 93 and 94 of the
Treaty (now Articles 107, 108 and 109 of the TFEU)
shall apply to the production of and trade in the
(97) Germany
agrees
with
the
Commission’s
view
that
the
products listed in Article 1 of the Regulation. Therefore,
granting of the loan was not done on market terms.
the measures at hand have to be examined in the light of
Had the loan been granted on market terms, a higher
State aid rules.
base rate would have been charged and a risk premium
would have been added considering the limited security
that the collateral for the loan offered.
VI.2. Existence of State aid within the meaning of
Article 107(1) of the TFEU
(98) It
can
be concluded
that
the
loan granted
to GfW
(92) Pursuant to Article 107(1) of the TFEU, any aid granted
contained a State aid element within the meaning of
by a Member State or through state resources in any
Article 107(1) of the TFEU as GfW received an
form whatsoever which distorts or threatens to distort
economic advantage it would not have obtained under
competition by favouring certain undertakings or the
normal market conditions. The aid element is calculated
production of certain goods is prohibited, insofar as it
as the difference between the interest charged and the
affects trade between Member States.
reference rate plus an appropriate risk premium.
(93) WAK is a public-law corporation and is financed partly
(99) Possible
passing
on
of
aid
to
legal
successors
from funds of the federal state of Rhineland-Palatinate
and partly from parafiscal charges. The measure is
( 17 ) See in particular the judgment of the ECJ, 13.7.1988, France v
therefore financed from state resources.
Commission, C-102/87, ECR 4067.
( 18 ) Germany’s intra-Community trade in wine amounted to
10 364 600 litres (imports) and 1 881 900 litres (exports) in
1999. No data are available for Rhineland-Palatinate. (Source:
Federal Statistical Office.)
(94) Aid to an undertaking appears to affect trade between
( 19 ) ECJ, 11.7.1996, SFEI and Others, C-39/94, ECR I-3547,
Member States where that undertaking operates in a
paragraph 60.
( 20 ) ECJ, 14.2.1990, France v Commission, C-301/87, ECR I-307,
paragraph 41.
( 16 ) OJ L 148, 6.6.2008, p. 1.
( 21 ) ECJ, 17.9.1980, Philip Morris v Commission, C-730/79, ECR 2671.

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EN
26.5.2012 Official
Journal
of
the
European
Union L
139/11
(100) According to Germany, GfW was liquidated and
losses as the debtor would have the chance to overcome
dissolved as of 1 June 2005. All remaining stock of
the crisis and improve its situation ( 24 ).
the remaining business areas was sold. All the proceeds
were used to repay WAK. It was agreed with the buyer (a
private person) that the value of all the stock remaining
according to the inventory list on 31 December 2004
(105) In the HAMSA ( 25 ) ruling of the CFI, the court rejects the
would be transferred to WAK at the end of 2005. The
Commissions previous practice of requiring equal share
value would be the original purchase value of EUR
of waivers of claims for private and public creditors in
79 579,79. GfW was deleted from the trade registry
relation to their share of the debt. Instead the court
during the course of 2006 and there is neither a legal
established that the private creditor test can be applied
successor nor any legal entity from which the aid could
also when the waivers relationship between the different
be recovered. In accordance with settled case-law ( 22 )
creditors is asymmetric. Paragraph 168 and 169 of the
recovery is according to Germany therefore not possible.
judgment reads:
(101) As the remaining assets of GfW were sold off, the person
‘(168) When a firm faced with a substantial deterioration of
who purchased them could possibly have benefited from
its financial situation proposes an agreement or series
the aid granted to GfW. However, as the person paid the
of agreements for debt arrangement to its creditors with
original purchase price and the market had slumped over
a view to remedying the situation and avoiding liqui
the passed years, it is clear that the price paid by the
dation, each creditor must make a decision having
purchaser was at least the market prices. Therefore, the
regard to the amount offered to it under the
Commission concludes that no aid was passed on to the
proposed agreement, on the one hand, and the
purchaser of GfW’s remaining stock. At the same time,
amount it expects to be able to recover following
GfW ceased to exist and therefore there is no aid to be
possible liquidation of the firm, on the other. Its
recovered.
choice is influenced by number of factors, including
the creditor’s status as the holder of a secured, prefer
ential or ordinary claim, the nature and extent of any
security it may hold, its assessment of the chances of
VI.2.1.b. T h e s u b o r d i n a t i o n a n d w a i v e r o f
the firm being restored to viability, as well as the
c l a i m s b y W A K
amount it would receive in the event of liquidation. If

it turned out, for example, that in the event the firm
(102) The subordination of claims and the waiver of claims and
was liquidated, the realisation value of its assets was
interest payments were financed by WAK’s own
only sufficient to cover mortgage and preferential
resources and a corresponding loan taken out by WAK
claims, ordinary claims would have no value. In such
and are therefore to be considered to be financed
a scenario, acceptance by an ordinary creditor of the
through State resources.
cancellation of a major part of its claim would not
really be a sacrifice.
(103) To establish whether the subordination of claims and the
waiver of claims and interest payments constitute State
(169) It follows that, in the absence of knowledge about the
aid in the meaning of Article 107(1) of the TFEU to GfW
factors which determine the respective values of the
it is necessary to establish whether GfW receives an
choices offered to creditors, the mere fact that there is
economic advantage which it would not have obtained
an apparent lack of proportion between the amounts
under normal market conditions and/or whether the
which the various creditors have written off is not in
measure enabled GfW to avoid having to bear costs
itself conclusive as to the reasons which led them to
which it would normally have had to meet out of its
accept the debt remissions proposed.’
own financial resources. This assessment has to be done
using the private creditor test. The private creditor test
assesses whether, under the same market conditions, a
private creditor would have acted or has acted in the
(106) In addition, in the HAMSA ( 26 ) case the CFI established
same way as the public creditor.
that, a public creditor acts like a private creditor when he
decides to waive a share of his claims, after extensive and
reasonable evaluation of how much he might be able to
recover, of the risk of liquidation and of the chance of
the firm being restored to viability. Lastly, in the
(104) According to settled case-law, waiving part of the claim
Commission’s decision in the Huta Cynku ( 27 ) case, the
can be required in order to increase the amount which is
Commission decided that no advantage and thus no State
effectively recovered. A private creditor would act so as
aid exists where restructuring would yield better proceeds
to minimise his losses ( 23 ). In case a claim was not suffi
than liquidation.
ciently secured, agreement to postpone the repayment
would increase the chances of repayment without
( 24 ) See footnote 12.
( 25 ) See footnote 13.
( 22 ) See footnote 10.
( 26 ) See footnote 13.
( 23 ) See footnote 11.
( 27 ) See footnote 14.

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L 139/12
EN
Official Journal of the European Union
26.5.2012
(107) With reference to the case-law quoted above, when
(110) The winegrowing enterprises and merchants on the other
assessing whether a private creditor would have acted
hand faced a very different calculation. Firstly, they had
or has acted in the same way as WAK, it is necessary
already received 80 % of the payment for their delivered
to examine the choices that WAK had when it was
goods. Secondly, according to the offer by GfW they
concluded that GfW was facing insolvency and what
would only receive 10 % of the 20 % still owed to
the economic implications connected to these choices
them. In effect this meant that they would only receive
would be. As a second step, it is also necessary to
an additional 2 % of the agreed purchase price if they
carry out the same examination for the winegrowing
signed the agreement. This is certainly less than what
enterprises and merchants and then to evaluate whether
they could expect in insolvency proceeding, irrespectively
the situation faced by WAK can be compared to and
of their security standing (simple, extended or prolonged
evaluated based on the actions of the winegrowing enter
retention of title). In average they could expect to receive
prises and merchants.
48 % of their remaining claims (EUR 2,1 million of the
total EUR 4,4 million owed them). It is therefore no
surprise that some of the winegrowing enterprises and
merchants refused the offer by GfW. Thirdly, it must
have been evident that it would be in WAK’s interest
to waive part of its claims and avoid insolvency even if
(108) When informed that GfW was facing insolvency, WAK
the winegrowing enterprises and merchants did not do
had two choices. It could either allow for insolvency
the same, which again would enable the winegrowing
proceedings to be opened, or it could try to avoid this
enterprises and merchants to get a larger share of their
by reaching an agreement with GfW which would enable
remaining claims back than the offered 10 %. Fourthly,
GfW to continue trading. Based on the information
several of them had already taken GfW to court and the
submitted by Germany and supported by a report from
court had rules in their favour, obliging GfW to settle
3 February 2003 prepared by an independent auditor
80 % of the remaining claims.
(see recital 88), the economic implications connected
with these two decisions are according to Germany as
follows. Ex-ante, in case of insolvency proceedings, WAK
could expect to recover a maximum of about EUR
2,4 million of its claims. In the case WAK signed an
agreement with GfW, waiving part of its claims and
thereby enabling GfW to continue trading, WAK could
ex-ante expect to recover some EUR 5,1 million of its
(111) It can be concluded that despite the fact that the wine
claims. This leaves a difference of EUR 2,7 million in
growing enterprises and merchants and WAK were all
favour of enabling GfW to avoid insolvency proceedings.
creditors to GfW, the choices and outcome of those
Whether the winegrowing enterprises and merchants
choices for WAK and the winegrowing enterprises and
were willing to do the same, only had a slight impact
merchants were so dissimilar that they are not
on the recovery calculations, but did not change the
comparable. The fact that the winegrowing enterprises
outcome on the comparison of the two alternatives.
and merchants chose not to waive their claims should
not have a negative bearing when analysing whether
WAK acted in accordance with the private creditor test.
(109) The estimate of a recovery rate in case of insolvency of
EUR 2,4 million in the report is based on the German
assumption that the claims of the winegrowing enter
prises and merchants of EUR 4,4 million would have
to be settled before those of WAK. However, according
(112) Weighing the different options for WAK against each
to the European Commission, the German insolvency law
other the Commission concludes that the partial subordi
states that only the debt to those winegrowing enter
nation and waiver of claims of 4 December 2000 and of
prises and merchants with prolonged retention of title
21 February 2001 totalling of EUR 5 005 441,60 and
would have had to be settled before the debts of WAK.
waiver of interest payments as from 31 December 2000
The other debts would be on an equal standing with the
was the most favourable option for WAK and is
debt of WAK. The European Commission’s own calcu
therefore in accordance with the private creditor test.
lations show however that even in the case where the
The subordination and waiver of claims make out a
claims of WAK and the winegrowing enterprises and
debt deferral, which is more advantageous to the
merchants would all have equal standing, WAK could
creditor compared to liquidation. In accordance with
expect to recover the maximum of EUR 4,7 million in
settled case-law ( 28 ), a public creditor will balance the
case of insolvency (based on a maximum total repayment
advantage inherent in obtaining the offered sum under
of EUR 6,8 million in case of insolvency and that WAK
the restructuring plan and the sum they would be able to
and the winegrowing enterprises received repayment in
recover via the firm’s liquidation. Hence, GfW did not
proportion to what they were owed — EUR 10 million
and EUR 4,4 million respectively for WAK and the wine
growing enterprises and merchants). It can therefore be
( 28 ) ECJ, 29.4.1999, Spain v Commission, C-342/96, ECR I-2459,
paragraph 46; ECJ, 29.6.1999, DMT, C-256/97, ECR I-3913,
concluded that ex ante the more favourable option for
paragraph 24; and CFI, 11.7.2002, HAMSA v Commission, T-
WAK would be to enable GfW to avoid insolvency.
152/99, ECR II-3049, paragraph 168.

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26.5.2012 Official
Journal
of
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Union L
139/13
receive any advantage it would not have received under
were raised whether the awarded security position was
normal market conditions and thus no State aid was
really in accordance with normal business practice.
awarded to GfW as a result of WAK’s decision to
Secondly, the price paid for the purchased must was
subordinate and waive part of its claims.
estimated to be above the market price. Thirdly, the
winegrowing enterprises and merchants decision to not
waive any of their claims when GfW was faced with
insolvency was put into question together with WAK’s
decision to subordinate and then waive a share of its
claims even though the winegrowing enterprises and
merchants decided not to waive the 90 % of their
(113) In the opening of procedures doubt was expressed as to
remaining claims (20 % of value of stock).
whether WAK kept the subordination and waiver of
claim to a strict minimum. However, according to the
comments of Germany, WAK waived the share of its
claims needed to cover GfW’s deficit for 2000, which
was necessary according to German insolvency law (see
recital 25) in order to avoid insolvency proceedings and
enable GfW to continue trading. In the first contract
(signed on 4 December 2000) between GfW and WAK,
VI.2.2.a. A t t h e t i m e o f p u r c h a s e o f m u s t —
in order to avoid GfW’s insolvency, WAK agrees with
s e c u r i t y p o s i t i o n a w a r d e d
GfW on a subordination of claims of the same amount
as GfW’s deficit after the winegrowing enterprises and
(116) In their comments, Germany has given their assurances
merchants had agreed to waive 90 % of their remaining
that that simple, extended or prolonged retentions of title
claims and to, if necessary, waive the amount of claim
awarded to the different winegrowing enterprises and
they had agreed to subordinate (see recitals 79 and 80).
merchants in connection with the purchase of must,
The reason for the waiver being larger than first expected
was indeed in accordance with normal business
was that despite WAK’s and GfW’s efforts to convince
practise. This means that though it gave the winegrowing
the winegrowing enterprises and merchants to contribute
enterprises and merchants a relatively strong security
their part in helping GfW to avoid insolvency (see recitals
position, especially those awarded prolonged retention
79 and 80 of the German comments), the winegrowing
of title, it was in accordance with normal business
enterprises and merchants’ decision to not waive any of
practise and was not stronger than had they made
their claims for the reasons mentioned in recital 110
arrangements with a private purchaser.
above. As mentioned in recital 108, the decision by
the winegrowing enterprises and merchants to not
waive a share of their remaining claims only had a
limited impact on WAKs economic assessment and did
not change the outcome of this assessment: that it was
economically preferential for WAK to enable GfW to
avoid insolvency proceedings.
(117) The Commission makes reference to the recommen
dations ( 29 ) registered by the Federation of German
wineries and wine retailers, Trier, the Federation of
German wine merchants, Mainz and the German Wine
growers’ Association, Bonn (Der Bundesverband der
Deutschen Weinkellereien und des Weinfachhandels e.V.,
(114) The Commission therefore concludes that WAK’s partial
Trier, der Bundesverband der Deutschen Weinkommissionre
subordination and waiver of claims was the most
e.V., Mainz und der Deutsche Weinbauverband e.V., Bonn)
favourable option for WAK and is therefore in
with the German competition authorities (Bundes
according with the private creditor principle and are
kartellamt) in accordance with § 22 Abs. 3 Nr. 2 of the
therefore not to be considered State aid within the
Act against Restraints of Competition (des Gesetzes gegen
meaning of Article 107(1) of the TFEU to GfW.
Wettbewerbsbeschrnkungen) ( 30 ). The first version of the
recommendations was registered in 1990 and the
current version in 2005. These recommendations make
it clear that in cases where the full purchase price is not
paid at the time of transfer of the merchandise the seller
should retain the title of ownership until the full price
has been paid. The security positions awarded the wine
VI.2.2. Existence of aid to winegrowing enterprises and
growing enterprises and merchants in the case at hand
merchants
gave varying degree of security. Only the ones with
prolonged retention of title had the full security for
(115) In the opening and subsequent extension of the formal
investigation procedure questions were raised regarding
possible aid to the winegrowing enterprises and
( 29 ) http://www.doerr-weinkommission.de/fileadmin/user_upload/agb_
merchants. Firstly, the security position awarded the
doerr.pdf
( 30 ) http://www.bundeskartellamt.de/wDeutsch/download/pdf/
winegrowing enterprises and merchants by GfW at the
Merkblaetter/Merkblaetter_deutsch/Konditionenempfehlungen0509.
time of purchase seemed relatively strong and doubts
pdf

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L 139/14
EN
Official Journal of the European Union
26.5.2012
payment. This means that the security position for the
(121) The guide price itself was decided upon by the Council
winegrowing enterprises and merchants were in average
once a year and the price was expressly set to support
not as strong as recommended in the recommendations
the market. To do this it obviously had to be set at a
mentioned above. The Commission therefore accepts,
high enough level. Council Regulation (EC) No
with reference to the recommendations and the actual
1676/1999 of 19 July 1999 fixing the guide price for
security position awarded, Germany’s assurances that it
wine for the 1999/2000 wine year ( 32 ) fixed the guide
is normal business practice to award security positions as
prices for the different categories of wine. The price for
was done to the winegrowing enterprises and merchants
category AII (white table wine from vine varieties of the
in this case and that the security position awarded was
Sylvaner or Müller-Thurgau type) was set at EUR 82,81
not stronger than under a normal contract between two
per hectolitre and the one for AIII (white table wine from
private actors and therefore do not constitute State aid in
vine varieties of the Riesling type) at EUR 94,57 per
the meaning of Article 107(1) of the TFEU.
hectolitre. According to Annex III of Commission Regu
lation (EC) No 1681/1999 of 26 July 1999 fixing the
buying-in prices, aids and certain other amounts
applicable for the 1999/2000 wine year to intervention
VI.2.2.b. A t t h e t i m e o f p u r c h a s e o f m u s t —
measures in the wine sector ( 33 ), the exact amount paid
t h e p r i c e p a i d f o r t h e p u r c h a s e d
for distillation depended on the degree of alcohol of the
m u s t
wine delivered because the price for preventive distil

lation (65 % of the guide price) was calculated by the
(118) In the opening of procedures, the price paid by GfW for
Commission not per hectolitre but by degree of alcohol
the must bought was said to be above the market price.
per hectolitre that year.
As market price the price for table wine was used and
the price quoted as reference price was EUR 0,26 per
litre. In their comments, Germany has supplied
(122) The Commission’s main role in relation to distillation of
substantial information on the business strategy of
wine was to assess the actual market situation and
GfW, which shows that the ordinary table wine market
accordingly fix the quantities admitted for preventive
is not the relevant market and that the strategy of GfW
distillation each year in each Member State. Commission
was threefold. First, to buy table wine must with which
Regulation (EC) No 2367/1999 of 5 November 1999
to participate to the EU’s distillation programme (40 % of
introducing preventive distillation as provided for in
the stock). Second, to buy high quality must with the
Article 38 of Council Regulation (EEC) No 822/87 for
intention to sell it on the market for high quality raw
the 1999/2000 wine year ( 34 ) allocated 148 000 hecto
wine to be used for the production of sparkling wine
litres to the German market for the wine year
(60 % of the stock). Third, to participate to the EU’s
1999/2000. Commission Regulation (EC) No 546/2000
stocking programme with 20 % of the stock before it
of 14 March 2000 amending Regulation (EC) No
was sold for production of sparkling wine. When
2367/1999 introducing preventive distillation as
analysing whether two products belong to the same
provided for in Article 38 of Council Regulation (EEC)
market, the Commission makes use of the Commission
No 822/87 for the 1999/2000 wine year ( 35 ) increased
Notice on the definition of relevant market for the purposes
this to 468
000 hectolitres. Regulation (EC) No
of Community competition law ( 31 ). According to point 7 of
2367/1999 limited the quantity of wine sent for distil
the note, ‘a relevant product market comprises all those
lation to 40 % of the production. According to the
products and/or services which are regarded as inter
Commission’s records German producers distilled
changeable or substitutable by the consumer, by reason
around 400 000 hectolitres under this scheme.
of the products’ characteristics, their prices and their
intended use’.
(123) According to Germany the price paid for the wine sent
for distillation was EUR 0,50-0,55 per litre. Taking the
calculation method above into consideration, the
(119) The market for the must bought for taking advantage of
Commission finds the price quoted by Germany to be
the EU’s distillation programme is of course that for
realistic.
ordinary table wine. However, the relevant price must
be the price paid for wine sent for distillation.
(124) The Commission concludes that because of the EU’s
market intervention for a substantial share of the wine
two separate markets were created. One where the
(120) As all traditional intervention measures on agricultural
reference price was that paid for wine sent to distillation,
markets, preventive distillation of wine according to
in this case EUR 0,50-0,55 per litre, and another where
Article 38 of Regulation (EEC) No 822/87 has as its
the reference price was that of the market. The EUR 0,26
main aim to remove over-supply from the wine market
per litre as quoted in the opening of procedure decision
and thus the price of this voluntary distillation had to be
can therefore not be seen as the relevant reference price
high enough to give producers the incentive to send wine
for the must bought to be sent for distillation.
for distillation. The actual yearly price of the distillation
measure was defined by the Council as 65 % of the so
called guide price.
( 32 ) OJ L 199, 30.7.1999, p. 7.
( 33 ) OJ L 199, 30.7.1999, p. 15.
( 34 ) OJ L 283, 6.11.1999, p. 10.
( 31 ) OJ C 372, 9.12.1997, p. 5.
( 35 ) OJ L 67, 15.3.2000, p. 7.

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Union L
139/15
(125) In order to establish what was the relevant market for the
wine experts regarding how the price of wine is deter
must bought in order to turn it into raw wine for the
mined, the information from the Deutsches Weininstitute
production of sparkling wine it is first necessary to
as stated above and the profit calculation in GfW’s
evaluate if separate markets exist for wine and if
business plan.
whether the must bought by GfW belongs to the same
market as table wine or not. It will also be necessary to
decide whether higher quality wine could achieve higher
prices. The Commission in its statistics always refer to
(129) The business plan of GfW, submitted by Germany, shows
different prices depending on the quality of the wine.
that at the time of purchasing the must, GfW was
According to the Commission’s in-house wine experts
expecting to be able to send 40 % of the stock for
the price of wine is not the same for each batch and
preventive distillation at a price of EUR 0,50-0,55 per
the wine statistics available only give average prices for
litre, to sell 60 % of the stock at a price of EUR 0,375
different quality of wine. The actual price is influenced by
per litre and for 20 % of the stock, they expected to get
several elements. The main elements are the quality, the
an additional EU subsidy for stocking of wine of EUR
aging, the reputation, the demand and the alcoholic
0,06 per litre before selling it at EUR 0,375 per litre a
degree/degrees of Oechsle. The degree of Oechsle
year later. In total, they expected to sell the stock at an
indicates the ripeness and the level of sugar which is
average price of EUR 0,44 to EUR 0,46 and to make a
present in the grapes. It is important as it determines
profit of between EUR 0,06 and EUR 0,09 per litre. This
the final natural alcoholic degree of a wine. According
would leave a total profit of between some EUR
to the Deutsches Weininstitute (German wine institute)
2,64 million and EUR 3,96 million.
the production of sect/sparkling wine requires a high
degree of alcohol content in the raw wine ( 36 ).
(130) In 1999, GfW sent 40 % of its stocks to preventive
distillation for which it received a price of EUR 0,50-
(126) This supports Germany’s claims that the degree of
0,55 per litre. In view of a fall in prices on the market
Oechsle in the must needs to be higher if the final
in wine at the end of 1999 — which had not been
product is to be sparkling wine than if it is to be table
expected by GfW considering the higher prices the year
wine and that a premium had to be paid for the must
before — GfW decided not to sell its remaining stock
with a higher degree of Oechsle. The Commission
that year but to store it and sell it in 2000, or if the
therefore accepts Germany’s arguments that separate
prices on the market would remain low, to take
markets exist and that the price must indeed have been
advantage of a second round of preventive distillation.
higher for must to be used for the production of
This decision was based on the assumption that
sparkling wine rather than for must used for the
preventive distillation would be continued. However,
production of table wine. As a result, the Commission
the new Regulation (EC) No 1493/1999 on the
also accepts that the price paid by GfW at the time of
common organisation of the market in wine abolished
purchase cannot be compared to the price for table wine,
preventive distillation. Instead it introduced the option of
EUR 0,26 per litre, as done in the opening of the
voluntary distillation to supply the potable alcohol
procedure.
market. The newly introduced crisis distillation measure
can only be used in exceptional cases of market
disturbance. Recital 35 of Regulation (EC) No
(127) Germany goes on to provide information regarding the
1493/1999 explicitly refers to the elimination of the
achievable price on the relevant market, the market for
distillation system as an artificial outlet for surplus
high quality must to be used for the production of
production. The new Regulation entered into force on
sparkling wine. Pursuant to this information, on the
31 July 2000.
market of raw wine for sparkling wine, the basic price
paid for one litre of must of 60 degrees Oechsle was
EUR 0,312 per litre. For each additional degree Oechsle
(up to a maximum of 80 degrees Oechsle) EUR 0,005
(131) For GfW this meant that the distillation measures in the
per litre was paid. The winegrowing enterprises and
2000/01 wine year were considerably less favourable
merchants were paid for their high quality must, 60 %
than those in previous years. In distillation to supply
of the must purchased, in accordance with this principle.
the potable alcohol market only around half of the
Also, according to the import statistics of the German
previously achieved average price of EUR 0,50-0,55 per
winegrowers association (Deutsche Weinbauverband) for
litre could be achieved.
the years 1998-2001, submitted by Germany, imported
bulk white wine, which due to its high quality is suitable
for the production of sparkling wine, had a market price
of EUR 0,38 per litre.
(132) In the view of Germany this development could not have
been predicted when GfW decided to keep the wine in
storage. The Commission, on the other hand, believes
(128) The Commission is willing to accept the arguments of
that this development was in fact foreseeable. The new
Germany for a relevant market price of around EUR 0,38
common organisation of the market in wine explicitly set
per litre, based on the information from its in-house
out to eliminate the distillation system. Thus it ought to
have been clear to GfW, at the time it was decided to go
for a second round of distillation, that distillation
( 36 ) http://www.deutscheweine.de/icc/Internet-EN/nav/0f2/0f207d71-
measures in the second part of 2000 and onwards
9ffe-401e-76cd-461d7937aae2&sel_uCon=02a235d6-994d-7017-
288b-5952196117f5&uTem=0e3307d7-19ff-e401-e76c-
would not provide any relief from the falling prices on
d461d7937aae
the wine market.

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L 139/16
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Official Journal of the European Union
26.5.2012
(133) However, the arguments around whether GfW should
(139) From the current viewpoint, the exemptions provided for
have known about the change in the Regulation are irrel
in Article 107(2) and (3)(a), (b) and (d) are not applicable,
evant. The business plan at the time of purchase, against
since the aid in question is neither:
which GfW’s behaviour as a private investor should be
judged, only included a first round of preventive distil
lation, which did take place and for which GfW received
EUR 0,50-0,55 per litre. It did not include a second
round of preventive distillation and therefore the
— aid to promote the economic development of areas
expected profit from such distillation was not a part of
where the standard of living is abnormally low or
the overall profit calculation at the time of purchase. It
where there is serious underemployment, nor
was not part of the business plan and though there is no
doubt that GfW’s decision to go for a second round of
distillation when the market price fell was a bad one, it
cannot be seen as State aid to the winegrowing enter
prises and merchants at the time of purchase.
— aid to promote the execution of an important project
of common European interest or to remedy a serious
disturbance in the economy of a Member State, nor
(134) Based on the above, the Commission concludes that GfW
paid the market price for the must purchased in the
autumn of 1999 and that therefore, no State aid in the
meaning of Article 107(1) of the TFEU was awarded the
— aid to promote culture and heritage conservation
winegrowing enterprises and merchants.
where such aid does not affect trading conditions
and competition in the Union to an extent that is
contrary to the common interest.
VI.2.2.c. A t t h e t i m e o f s u b o r d i n a t i o n a n d
w a i v e r o f c l a i m s b y W A K
(135) In recital 114 it was concluded that the subordination
and waiver of claims by WAK was done purely out of
(140) Article 107(3)(c) of the TFEU is therefore the only
self interest and in accordance with the private creditor
exemption which might possibly apply.
test and that there therefore was no State aid to GfW.
The fact that the decision by WAK favoured the wine
growing enterprises and merchants has no relevance as
this was not the intention, but just a consequence of
WAK trying to maximise the recovery of its own funds.
(141) At the time of the granting of the aid, aid to primary
producers was evaluated directly under Article 107(3)(c)
of the TFEU. In accordance with the praxis at the time,
aid for investments, credit, the livestock sector, producer
(136) The Commission concludes that when subordinating and
organisations, publicity and promotion, compensation
waiving its claims, WAK did not award any State aid in
for damages caused by diseases, insurance premiums
the meaning of Article 107(1) of the TFEU to the wine
and technical assistance could when fulfilling certain
growing enterprises and merchants.
criteria be deemed compatible with the internal market.
None of the mentioned forms of compatible aid can
however be used to exempt the aid in question.
VI.3. Classification of the aid as illegal aid
(137) Since the aid element contained in the loan by WAK in
favour of GfW was granted and paid without prior notifi
(142) In addition, concerned not to leave any avenue
cation to the Commission, it is illegal within the meaning
unexplored, the Commission has examined whether the
of Article 1(f) of Council Regulation (EC) No 659/1999
guidelines for rescuing and restructuring firms in
of 22 March 1999 laying down detailed rules for the
difficulty might not be applicable to the case in
application of Article 93 of the EC Treaty ( 37 ).
question. The first condition to be fulfilled by an under
taking if it is to benefit from rescuing or restructuring aid
is that it should be considered as being in difficulty
within the meaning of the guidelines on State aid for
VI.4. Exemptions provided for in Article 107 of the
rescuing and restructuring firms in difficulty ( 38 ). There
Treaty regarding the loan to GfW
is no indication from the information held by the
Commission that the undertaking was in difficulty
(138) It must therefore be examined whether one of the
within the meaning of the abovementioned guidelines
exemptions to the prohibition of State aid under
when the aid was granted. It is only a year later due to
Article 107(1) of the TFEU applies.
a slump in the market that GfW finds itself in difficulty.
( 37 ) OJ L 83, 27.3.1999, p. 1.
( 38 ) OJ C 288, 9.10.1999, p. 2.

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(143) In any case, the Commission wishes to point out that it
(150) Where illegally granted State aid is found to be incom
is up to the Member State concerned to fulfil the duty of
patible with the internal market, the natural consequence
cooperation it has towards the Commission by providing
is that the aid should be recovered in order — as far as
all the elements required for the Commission to be able
possible — to restore the competitive position that
to check that all the conditions of the derogation from
existed before the aid was granted.
which it is asking to benefit have been met ( 39 ). In the
case in question, Germany has not supplied sufficient
information enabling the Commission to assess the
(151) As no legal successor to GfW exists, recovery is not
data in the light of these guidelines, nor has the
possible in accordance with settled case-law ( 40 ),
German authorities supplied sufficient documentation
to enable the Commission to evaluate the aid in the
light of the other forms of compatible aid mentioned
HAS ADOPTED THIS DECISION:
in paragraph 126, and this in spite of the information
provided by the Commission in point 44 of the decision
to initiate the investigative procedure.
Article 1
The State aid, amounting to the difference between the interest
(144) Aid measures which compatibility is to be assessed
rate charged on the loan to GfW and the market interest rate
directly under Article 107(3)(c) of the TFEU has to be
plus the risk premium which should have been charged on the
done so restrictively. It must be clearly demonstrated that
loan, unlawfully granted by Germany, in breach of
the positive effects of the aid measure outweigh the
Article 108(3) of the Treaty on the Functioning of the
damaging effects the aid could have on competition
European Union, in favour of Gesellschaft für Weinabsatz Pfalz
and the proper functioning of the internal market.
GmbH is incompatible with the internal market.
Unilateral State aid measures which are simply intended
to improve the financial situation of producers but which
in no way contribute to the development of the sector
Article 2
are not considered to fulfil these criteria and hence
constitute operating aid which is incompatible with the
The subordination and waiver of claims by WAK does not
constitute aid to GfW or the winegrowing enterprises and
internal market.
merchants within the meaning of Article 107(1) of the Treaty
on the Functioning of the European Union.
(145) For the above reasons, the aid granted to GfW as an
element of the loan does not comply with any of the
possible exemptions to Article 107(3). It therefore
Article 3
constitutes aid incompatible with the internal market.
The purchase of must in 1999 by GfW does not constitute aid
to the winegrowing enterprises and merchants within the
(146) No other exceptions under Article 107(3)(c) of the TFEU
meaning of Article 107(1) of the Treaty on the Functioning
are applicable.
of the European Union.
VII. CONCLUSIONS
Article 4
(147) For the above reasons, the Commission finds that the
Germany shall not need to recover the aid referred to in
loan granted to GfW may not be considered to be
Article 1 from the beneficiary as the beneficiary is insolvent
compatible with the internal market. The Commission
and has been dissolved and deleted from the trade registry
also finds that Germany implemented the measure
and there is no legal successor.
unlawfully.
Article 5
(148) For the above reasons, the Commission finds that the
subsequent subordination of claims and waiver of
This Decision is addressed to the Federal Republic of Germany.
claims and future interest payments does not constitute
State aid in favour of GfW nor in favour of the wine
growing enterprises and merchants.
Done at Brussels, 29 June 2011.
(149) For the above reasons, the Commission finds that the
purchase of must was done at market prices and in
For the Commission
accordance with common business practice and
therefore does not constitute State aid to the wine
Dacian CIOLO
growing enterprises and merchants.
Member of the Commission
( 39 ) CFI, 15.6.2005, Regione autonoma della Sardegna v Commission, T-
( 40 ) ECJ, 2.7.2002, Commission v Spain (Magefesa), C 499/99, ECR I-
171/02, ECR II-2123, paragraph 129.
6031.

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