European Commission demands answers over Czech subsidy dispute

The European Commission has formally requested information from the Czech Ministry of Industry and Trade regarding a 100 million CZK subsidy involving the Penam bakery, part of the Agrofert group. The Commission seeks confirmation on whether the funds were paid exclusively from the Czech state budget and asks for details on corrective and financial measures taken to recover the money.

The dispute centers on a production line for toast bread at the Zelená louka bakery. While the project was initially funded through national pre-financing, European auditors concluded the technology was not unique or innovative, as a sister company in Germany was already using the same equipment. Consequently, the Commission refused to reimburse the costs.

Legal proceedings are ongoing, with the European Public Prosecutor’s Office having indicted the bakery and two individuals for subsidy fraud and attempting to damage EU financial interests. The Czech Ministry of Industry, acting as a victim in the criminal proceedings, has been attempting to recover the funds since autumn 2021 without success. Agrofert leadership and Andrej Babiš have denied any wrongdoing, maintaining that the project complied with all subsidy rules.