Mixed verdict in managers' butter adultery case

By Neil Merrett

- Last updated on GMT

Related tags: Butter, European union

Two French dairy managers face suspended prison sentences and €23m
in fines for their alleged role in a Europe-wide scheme to produce
and distribute adulterated butter, the European Anti Fraud Office
(OLAF) has said.

The defendants, who are set to appeal against the verdict, were convicted on 22 November last year at the Créteil Magistrates Court for manufacturing products with the illegally produced butter which were to be sold "under false pretences".​ Adulterated butter, which is substituted with animal fats and other synthetic materials, is a particular problem for EU dairy groups, as the illegal product can made cheaply before being sold on for maximum profit. In addition, it can also be used to obtain EU subsidies set aside for the production of genuine butter. Both parties were cleared of a further charge of conspiracy to defraud European production subsidies though. These charges formed part of a wider investigation into adulterated butter bought from Italian companies linked to organized crime back in the late 90's. The two unnamed defendants received suspended sentences of eight months and five months respectively for their alleged roles in the butter scandal. They also have to pay back €23m in unlawfully obtained subsidies to the French Office for Livestock - l'Office français de l'Élevage - which supplies subsidies in the country. Siim Kallas, OLAF vice president and EC Commissioner for anti-fraud, said the ruling sent out a message to processors and producers alike that fraudulent use of European dairy subsidies would not be tolerated. According to OLAF, a number of Italian companies during the last decade manufactured industrial butter using animal fats and synthetic materials to then be sold on to member states often in France and Belgium. The European Anti-Fraud Office has since begun working in conjunction with national authorities like the Serious Financial Crime Office of the French Judicial Police and the Naples Prosecutor's Office backing up investigations in France, Italy, Belgium and Germany. The investigations have attempted to uncover the production and distribution of adulterated butter on the European market, due to the impact it can have on the EU community budget through bogus subsidies claims. In Germany, authorities have not themselves made any convictions related to the case, but have recovered €150,000 in funding, according to OLAF. Italian authorities claim that in 1999, about 16,000 tonnes of adulterated butter was made and sold for more than €45 million on the market. Community subsidies were then also obtained on the product which was declared as butter. A Mafia gang set up what amounted to a holding group involving the major producers of butter for industrial use in the south of Italy. The group succeeded in gaining control of one of the largest companies in the industry in Northern Italy, which made it one of the main butter producers in Italy.

Related topics: Markets, Butters & Spreads

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