An EU market management committee on Thursday reduced to zero the level of export refunds on frozen chicken after cutting it from 325 euros ($430) per tonne to 217 euros in October 2012 and then to 108.5 euros in January this year.
French poultry firms, which have relied on the refunds to boost sales in Middle Eastern markets, said they were indispensable at a time of high feed costs and to meet increasing competition from Brazil.
The French government said it was considering ways to respond to the move. "Nothing justifies this brutal decision," the agriculture and food ministry said in a statement.
The EU executive did not agree, saying it considered the refunds as unjustified due to improving market conditions.
"(The) proposal to reduce export refunds for poultry was based on the market situation and, in particular, the high prices observed on the internal market, the foreseeable reduction in feed costs - soy, maize and wheat - and the positive and sustained trend of EU exports to third countries," Roger Waite, the EU Commission's agriculture spokesman, said by email.
France received nearly 94 percent of the subsidies, which amounted to 55 million euros in total in 2012-2013.
The government said the poultry market has worsened since the last cut in export refunds, due mainly to tougher competition with Brazil. It claims that 10 member states out of 28 had agreed with France on the EU panel.
French poultry firms warned the decision could lead to severe job losses.
"If a cut in export subsidies could be partly justified six months ago, it makes no sense today in a market that has sharply deteriorated and with the Brazilians that are doing massive dumping," Christian Marinov, head of the French poultry association, said. ($1 = 0.7639 euros)
