Food System

Coccodì, 3 million Polish and Spanish eggs sold as Italian

August 14, 2020

104

Three executives of Coccodì, the self-styled Italian leader ‘in the production of fresh eggs from organic, free-range and free-range farms,’ are under investigation by the Public Prosecutor’s Office at the Cremona District Court. 3 million Polish and Spanish eggs are found to have been faked and sold as Italian. Fraud in trade and sale of industrial products with false signs. (1)

However, the news, which appeared in Il Resto del Carlino on 11.8.20, was not picked up by anyone. (2) The Italian press is prone to slam the headline-stealers, but not even the big advertising investors and their friends. (3) Shame squared.

Coccodì, 3 million eggs of ‘100% Italian’ origin. Indeed Polish, or Iberian

The Coccodì brand is historically associated with fresh egg production in Lombardy. The website of Nuova Coccodì S.r.l. refers to:

– ‘high quality (…) involving limited production, controlled feeding and strict adherence to hygiene and health standards’,

– ‘In-house production of feed for chicken feed. Only 100% Italian and GMO free raw materials’.

However, the Carabinieri, through the Anti-Sophistication Unit (NAS), has uncovered another truth about Coccodì’s operations:

– import from Poland and Spain of about 3 million eggs (ten tractor-trailers),

– stamping or otherwise labeling and reselling the aforementioned goods, including through Carrefour Italia, as if they were ‘100% Italian.’

Carabinieri from the RACs(Agri-food Protection Units), during the lockdown, had in turn conducted the ‘Yolk 3’ investigation. As a result of which 175,000 eggs were seized, by RACs in Turin, Rome and Messina. (4)

Fraud in trade

Coccodì allegedly tried to defend itself on the grounds that it sold ‘San Faustino’ brand Polish eggs to Carrefour out of ‘state of necessity,’ in the face of a surge in demand during the Covid-19 emergency. A completely ridiculous justification. Demand for fresh eggs actually increased in the first month of the lockdown, albeit offset by the lockdown of the HoReCa channel (hotels, restaurants, catering).

But market dynamics certainly cannot legitimize forgeries of stamps and labels that are instead instrumental in making an unfair profit, to the detriment of consumers and the market.

‘Food information. Do not mislead as to the characteristics of the food and, in particular, its nature, identity, properties, composition, quantity, shelf life, country of origin or place of provenance, method of manufacture or production‘ (EU reg. 1169/11, Article 7.1.a).

Made in Italy betrayed

The actual value of eggs arriving from Poland and Spain is evidently lower than those from Italy. Otherwise they would not be purchased a couple of thousand kilometers away, facing the economic and environmental costs of road transport, instead of in the Bel Paese. All the more so where one considers that Italian poultry farming is self-sufficient, that is, fully capable of meeting national demand.

Consumers in turn place a higher value on ‘100% Made in Italy‘ food products. As evidenced by the continued growth in their demand, periodically recorded by GS-1 Italy and Nielsen’s Immagino Observatory. (5) Particularly with regard to animal products, as they are well known:

– the levels of effectiveness and efficiency of public veterinary controls in Italy, unparalleled in the EU,

– the phenomena of social dumping carried out in Germany as in other European countries, in the livestock supply chains especially,

– food safety problems often found on eggs from other EU countries. Due to fraud (e.g., Fipronil, 2017) and hygienic deficiencies (e.g., Fipronil. Salmonella enterica ser. Gallinarum, see alert in RASFF system 2020.2910 on eggs from Poland distributed in Italy, 16.7.20).

New Coccodì, the paper ethic

Nuova Coccodì S.r.l. is established in 2016 to financially rescue the historic Coccodì (1962), thanks to a capital injection from new partners including at least one trust company. Its turnover, over 50 million, is worth expressing a production of about 400 million eggs and accounts for a 3 percent share of the domestic market (12.6 billion).

The ‘code of ethics‘ states the following:

– in ‘customer relations’, ‘Coccodì aims to achieve business success through the (…) most absolute compliance with the relevant regulations, primarily those of a sanitary nature and aimed at ensuring the wholesomeness of food products, as well as in compliance with the principles of fair market competition.
Therefore, Coccodì, in its relations with customers, strives to ensure that Collaborators observe the following rules:
– Comply with applicable laws and regulations; (…)
– Disclose as complete and comprehensive information about the services/products offered as possible;
– Refrain from using misleading or otherwise deceptive advertising messages’ (Code of Ethics, page 9).

Unfair Competition

The facts ascertained by the NAS highlight how Nuova Coccodì S.r.l. ‘burned’ the competition by placing on the market at ‘unbeatable prices’ products derived from criminal activities (which allegedly included the false stamping of eggs. So much for its Code of Ethics, which states the following in the section on supplier relations:

– in ‘relations with competitors’, ‘Coccodì recognizes the fundamental importance of a competitive market and, in compliance with national and EU antitrust regulations, as well as with the guidelines and directives of the Antitrust Authority, does not engage in behaviors or sign agreements with other companies that may adversely affect the competition regime among the various operators in the relevant market’ (Code of Ethics, page 10).

Inadequate organization

The two S.r.l. Nuova Coccodì and Società Agricola Nuova Coccodì also have an Organization Management and Control Model, pursuant to Leg. 231/01, adopted on 3/27/18 by the BoD.

‘The small size of the company and the simplicity of the production cycle allow effective controls even with a structure that is not particularly hierarchical’ (organizational model, chapter 3.5, general principles of the internal management system).

The organization model, in Chapter 5.1 dedicated to Identification of activities at risk – indicates only ‘sale of goods to third parties‘, not also the procurement of eggs, as an activity at risk of Commission of crimes against industry and trade (fraud in trade and others).

Pending the outcome of the investigation, it is easy to infer from the news reports how the organizational model did not work. And it is equally difficult to imagine how the importation of ten truckloads of eggs from Poland and Spain-an extraordinary operation, by enterprise selling ‘100 percent Italian’ eggs-could have escaped the top management, and management control, of an organization described as ‘simple.

Responsibility

The criminal responsibilities of corporate executives in the present case appear likely to trigger corporate administrative liability for crimes against industry and commerce. Pursuant to Leg. 231/01. (6)

The Competition and Market Authority (AGCM, so-called Antitrust Authority) may also consider the deceptiveness of commercial practices implemented by the professional, in violation of the Consumer Code (Legislative Decree 206/05).

Authorities will also have to assess the possible responsibilities of the large-scale retail trade (GDO), for failing to ensure compliance with existing rules-including rules requiring the origin and provenance of the primary ingredient to be indicated, where other than the place of production or packaging (reg. EU 2018/775) – by supplier Nuova Coccodì S.r.l. (7.8).

The role of large-scale retail trade

Large-scale retail operators, which in turn generally have codes of ethics and corporate organizational models under Leg. 231/01, they will not be able to avoid reviewing the position of Nuova Coccodì S.r.l. in their supplier lists. Considering where appropriate the suspension of the supplier until suitable assurances are offered regarding its reliability. Namely, the removal of all individuals responsible for what happened, including management control bodies and members of the supervisory body. In addition to having to conduct appropriate audits.

Theintegrity of the supply chain is inextricably linked to that of each of its individual participants, and rotten eggs must be removed as soon as possible. Without deluding themselves in the silence of a press conniving with big advertisers and their cronies.

Dario Dongo