#ASTEnate. The campaign to abolish double-down auctions and undercutting

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#ASTEnate! With this slogan #Filierasporca and Flai CGIL are leading a campaign to raise awareness about some of the food price formation mechanisms that are destroying agriculture and workers’ rights. The initiative, launched on March 24, 2017, warns consumers about the true price of below-cost products and calls on the GDO and the ministry to end some practices that strangle workers.

#ASTETE from double-down auctions.

The goal of the campaign is to stop the practice of double-down auctions. A purchasing mode that stresses price formation, even to the point of resulting in generalized damage to the entire supply chain.

Auctions based on the double-drop mechanism are held online. The GDO sits its suppliers around a virtual platform, asking them to bid on a large quantity of a certain product.

Based on the lowest bid, the GDO subsequently convenes a second online auction, which within hours calls for participants to raise their bids, in an obvious paradox, to further lower the selling price of that product.

#ASTEpend from shopping below cost

Closely related to the double-down auction mechanism is the “below cost” sale of food products. An irresistible lure for many. But which conceals distortions that the consumer does not even suspect. And it brings down the intrinsic quality of the product to the lowest level.

“Mechanisms such as below-cost selling and online auctions destroy the entire agricultural supply chain, because they fundamentally alter the relationship between large retailers and consumers, making the environment and producers pay the highest cost, in addition to exacerbating conditions of worker exploitation and caporalism,” explains Fabio Ciconte, director of Terra! and spokesperson for #FilieraSporca.

The call to shift gears

Campaigners appeal to all those responsible for such phenomena. They invite consumers to think about the value of underselling, leaving it unsold on the shelf. And they urge GDO and the Ministry of Agriculture to eliminate double-drop auctions. The GDO can simply give it up. Instead, the ministry is called upon to outlaw them. A letter to Minister Maurizio Martina (which we attach) clarifies the terms of the issue well. Moreover, noted and shared by the minister himself, who said he was “very concerned about double-down auctions and the strong impact they have on Italian agriculture.”

ANNEX Letter Minister Martina