One of the longest running EU subsidy schemes is proving too successful. The European Commission it to cut the subsidies paid on butter used in making various foodstuffs and confectionery including biscuits and patisserie. In the first half of this year, demand for butter under this subsidy scheme has risen to over 230,000 tonnes, more than 5% up on the same period last year and 14% higher than in 1999. On an annual basis these volumes are now accounting for about 45% of all butter consumed within the EU and are clearly a big item in the dairy budget of the EU. The subsidy, which can reduce the cost of butter for approved purposes by up to half, is normally claimed by the butter supplier on behalf of the end user. It is intended to make butter more competitive with other fats and oils, which are generally lower priced. A decision on the rate of subsidy is expected after The Grocer goes to press this week. {{M/E CANNED GOODS }}

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