Judgment of the General Court (Second Chamber) of 20 October 2011 -
   Eridania Sadam v Commission

   (Case T-579/08)

   State aid - Measures by the Italian authorities aimed at compensating
   for the losses suffered by the sugar refinery Villasor (Italy)
   following a drought - Decision declaring the aid incompatible with the
   common market - Duty to state reasons - Guidelines for State aid in the
   agricultural sector

   1.                     State aid - Commission decision finding aid to
   be incompatible with the common market - Decision concerning aid aimed
   at compensating for losses suffered by a sugar refinery following a
   fall in production of beet sugar due to a drought - Effect on trade
   between Member States - Adverse effect on competition - Duty to state
   reasons - Scope (Arts 87(1) EC and 253 EC) (see paras 29-32)

   2.                     State aid - Effect on trade between Member
   States - Adverse effect on competition - Aid of little importance in a
   sector with lively competition - Sugar producing market (Art. 87(1) EC)
   (see paras 37-39)

   3.                     Actions for annulment - Action brought against a
   Commission decision declaring State aid incompatible with the common
   market - Plea claiming error of legal basis having no effect on the
   legality of the contested decision - Invalid plea in law (see paras
   49-53)

   4.                     State aid - Prohibition - Exceptions - Economic
   disadvantages caused directly by natural disasters or exceptional
   occurrences - Guidelines for State aid in the agricultural sector - Aid
   aimed at compensating for losses in agricultural production or means of
   agricultural production - Scope (Art. 87(2)(b) EC; Commission Notice
   2000/C 28/02) (see paras 58, 61-71)

   5.                     State aid - Administrative procedure -
   Obligation on the Commission to put the parties concerned on notice to
   submit their observations - Exlusion of the interested parties from the
   benefit of defence rights (Art. 88(2) EC) (see paras 79-81)

   Re:

   APPLICATION for annulment of Commission Decision 2009/704/EC of 16 July
   2008 relating to State aid C 29/2004 (ex N 328/2003) that Italy is
   considering granting to the Villasor sugar refinery owned by Sadam ISZ
   (OJ 2009 L 244, p. 10).

   Operative part

   The Court:

   1.

   Dismisses the action;

   2.

   Orders Eridania SpA to bear its own costs and to pay those incurred by
   the European Commission.