Senatore Cappelli wheat and unfair commercial practices, confirmation by TAR Lazio

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Senatore Cappelli

On 6 November 2023, the ruling of the Lazio TAR on the ‘Senatore Cappelli’ wheat case was finally made known. The Regional Administrative Court confirmed the sanctions of Antitrust Italy against Società Italiana Sementi, SIS SpA – controlled by Bonifiche Ferraresi, protagonist of CAI SpA alias ‘Federconsorzi 2’ (1) – for having carried out unfair commercial practices to the detriment of Italian farmers. #CleanSpades.

1) ‘Senatore Cappelli’ wheat. History and myth

The history of ‘Senatore Cappelli’ wheat dates back to 1915, when the geneticist Nazareno Strampelli obtained a variety of durum autumn wheat, through genealogical selection of the North African Jenah Rhetifah population. The name of the cultivate it was dedicated to the Abruzzo senator Raffaele Cappelli, for his commitment to cereal farming and support for research. And it was widely spread in Italy for almost half a century, until it was replaced by varieties of smaller size and greater yield.

The myth of ‘Senatore Cappelli’ has developed over the last decade, also thanks to misleading advertising, still unpunished, regarding:

– the assimilation of the ‘Senatore Cappelli’ variety (XNUMXth century) to ‘ancient grains’, whose history goes back thousands of years,

– the boasting of hypothetical nutritional and health benefits, in violation of the Nutrition and Health Regulation (EC) No 1924/06. (2)

2) Public variety, private monopoly

The ‘Senatore Cappelli’ wheat it is registered in the Register of agricultural species varieties established in Italy at the Ministry of Agriculture. Its original constituent entity – the Research Center for Cereal Culture of Foggia (Puglia) – then merged into CREA, Council for agricultural research and analysis of agricultural economics, a public body subject to the supervision of the Ministry of Agriculture .

The maintenance in purity of variety‘ of ‘Senatore Cappelli’ wheat was entrusted by the public body CREA to SIS SpA, with an exclusive license for the multiplication and commercial exploitation of the seeds. (3) The contract, for a duration of 15 years, was stipulated during the agricultural year, the day before Christmas 2016. The president of SIS SpA Mauro Tonello, combination, is vice-president of the national Coldiretti.

2.1) Contractual obligations of the manager SIS SpA

The contract stipulated in 2016 between the public body CREA and the joint stock company SIS SpA provided that the latter:

– used certified ‘Senatore Cappelli’ wheat seed supplied by CREA,

– produced only the quantities of seeds necessary for its needs, e

– respected the production and commercial plans defined from 2017 onwards.

3) Unfair commercial practices, Antitrust investigations and sanctions

Antitrust Italy (Italian Competition Authority, AGCM) – following reports from some farmers – started an investigation against SIS SpA on 20 March 2019. To ascertain that:

1) SIS SpA made the supply of Cappelli certified seeds to growers subject to the condition that they sold the entire grain production to SIS itself, at pre-established prices,

2) SIS SpA has unjustifiably delayed or refused, on several occasions, the supplies of ‘Senatore Cappelli’ wheat seed requested by growers,

3) SIS SpA increased the selling price of seeds significantly (+55%) and not justified by higher production costs.

AGCM has therefore qualified these commercial practices as incorrect, as through such conduct SIS SpA has abused its greater commercial strength towards farmers, depriving them of alternatives to procure ‘Senatore Cappelli’ wheat seeds. And it therefore imposed three administrative sanctions on the Italian Seed Company, SIS SpA, for a total amount of €150.000. (4)

4) ‘Senatore Cappelli’ wheat and unfair commercial practices, the case before the Lazio TAR

Italian Seed Society, SIS SpA – represented among others by the lawyer Bernardo Giorgio Mattarella, nephew of the President of the Republic and member of the scientific committee of the Coldiretti Agromafie Observatory, as we have seen (5) – has lodged an appeal with the Lazio Regional Administrative Court against the Antitrust , towards associations:

– Codes, Center for Citizen Rights,
– Grano Salus,
– Confagricoltura,
– CIA (Italian Farmers Confederation),
– Copagri (Confederation of Agricultural Producers).

Subject of the appeal is the provision of 12 November 2019 with which Antitrust Italia imposed a fine of €150.000 on SIS SpA for having implemented three unfair commercial practices, in violation of article 62.2 of Legislative Decree 1/2012 (subsequently repealed by Legislative Decree 198/21, implementing the Unfair Trading Practices Directive EU No 633/2019). (6)

5) TAR Lazio, the decision

The appeal is unfounded. With the contested provision, the Authority ascertained that SIS had implemented three distinct unfair commercial practices (…):

– subordinated the supply of the aforementioned seeds, to growers interested in cultivating Cappelli wheat, to their acceptance of a closed supply chain relationship through an adhesion contract (‘SIS Contract’) which provided for the contribution/transfer to SIS itself of the subsequent harvest achieved by them, under conditions unilaterally pre-established by it and in the absence of negotiation with the contractual counterparties (…); Furthermore,

– the appellant allegedly delayed, and even denied, in an unjustified manner, the supply of seeds of the Cappelli variety to various growers, discriminating against the latter on the basis of purely subjective criteria such as, in particular, the membership of the seed applicants to certain organizations representation‘. Discrimination against farmers not registered with Coldiretti, as demonstrated in the Antitrust investigation. And in addition,

– ‘SIS would have imposed significantly higher seed prices without this being justified by actual costs for processing or research and development activities carried out by the seed company‘. (7)

6) Abuse of power. The Alce Nero case

SIS SpA, underlines the Lazio TAR, ‘was the only contractual counterparty for parties interested in producing Cappelli wheat in order to obtain the relevant seeds, as there were no alternative sources of supply for this product.

Secondly, the commercial preponderance of SIS was evident even where the company’s commercial counterparts were collectively organized farmers, as – for example – in the case of the [cooperative, ed.] company Alce Nero, that

– concluded an agreement with SIS according to which the latter supplied the seeds to the growers associated with Alce Nero, in exchange for the sale of the entire harvest achieved;

– Alce Nero then purchased its entire Cappelli wheat requirement from SIS by paying it a fee surcharge (which Alce Nero would not have paid if it had procured the grain directly from its farmers).

– In this regard, Alce Nero reported that he would have ‘happily done without’ this last step, considering it ‘useless‘, but that we had to find a way to collaborate with SIS (…)‘. (7) A duty on private monopoly, which the then minister Maurizio Martina had also denied in front of the Chamber of Deputies. (8)

7) Tyranny over small farmers

SIS is the main national seed company, having the form of a joint-stock company and a turnover which in 2018 amounted to 36 million euros‘, underlines the Lazio TAR, while ‘the growers interested in purchasing the seeds were mainly individual businesses:

– of the 409 subjects with which SIS concluded commercial relationships in the year 2017/2018, 305 were individuals/sole businesses, 98 were partnerships and only 6 joint-stock companies. Therefore, the significant imbalance in the commercial relations between the parties was also correctly established and described‘. (7)

8) Provisional conclusions

Behind the myth of the ‘Senatore Cappelli’ wheat, the oppression of the magic circle of Coldiretti towards all Italian farmers is revealed once again. Because everyone was forced to sign contracts with noose clauses and pay disproportionate costs for seeds. Even signing up for yellow flags, so as not to risk losing supplies and suffering serious commercial damage.

The harassment they are based, once again, on public concessions. Like the spaces entrusted to the Campagna Amica markets – another occasion for unpunished abuses (9) – or the secret ‘privatisation’, in this case, of a public cultivar. (10) In a civilized country, the concession would have been immediately revoked. And the investigating judiciary would have opened an investigation into the fateful contract.

The new commissioner extraordinary member of CREA – even if appointed by the minister Francesco Lollobrigida, very loyal like his predecessors to the Ras of Coldiretti (11) – would also be entitled to intervene, for the necessary investigations and the restoration of legality which may appear to have failed. The press in turn remains silent. Until?

#Clean spades

Dario Dongo

Footnotes

(1) Dario Dongo. Federconsorzi 2 aka CAI SpA, a bit of clarity. GIFT (Great Italian Food Trade). 15.3.21

(2) Senatore Cappelli wheat ‘highly digestible’? The lawyer Dario Dongo answers. DO (Food and Agriculture Requirements). 5.8.23

(3) The contract between CREA and SIS of 23 December 2016 provides that the Prebase, Base and R1 categories constitute the ‘technical seed intended to be multiplied for seed production‘ of the next category, while category R2 indicates ‘seed intended for the commercial seed market‘. The latter cannot generate other certified seed (since it is not sufficiently pure), but rather grain, which can be used or sold for transformation

(4) Antitrust (Authority for Competition and the Market). Case AL22 – Marketing of Senatore Cappelli wheat. AGCM Provision 12.11.2019 n. 27991 https://tinyurl.com/scb9d9yz

(5) Dario Dongo. Coldiretti, the Agromafie Observatory and the Porsche of the Customs Agency. The document. GIFT (Great Italian Food Trade). 25.6.23

(6) Dario Dongo. Unfair commercial practices in the agri-food chain, Legislative Decree 198/2021. The ABC. GIFT (Great Italian Food Trade). 26.2.22

(7) Regional Administrative Court for Lazio, First Section. Sentence 6.11.23, n. 16396/2023 Register of Collegial Measures

(8) Senatore Cappelli wheat is a public variety, there is no risk of monopoly. Earth and Life editorial team. 21.12.17 https://tinyurl.com/9nrh59r7

(9) Dario Dongo. Campagna Amica, Coldiretti insists on extorting farmers. GIFT (Great Italian Food Trade). 28.12.22

(10) The ‘privatization’ of wheat Senator Cappelli? It’s a state secret! The appeal to the TAR is ready. The new Vespers. 24.8.18 https://tinyurl.com/4fhymbyk

(11) Dario Dongo, Paolo Caruso. The Minister of Agriculture in favor of GMOs and against ancient grains. GIFT (Great Italian Food Trade). 30.7.23

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Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.

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