After the deadline for implementing the Unfair Commercial Practices Directive in EU member states expired on 1.1.21, a new draft decree emerges unofficially. (1)
The latest draft is better than the previous ones in the part where it finally introduces a ban on below-cost sales of agricultural and food commodities. (2) However, some critical issues worthy of correction remain.
Sales below cost, it is finally banned
It is finally prohibited to ‘impose excessively burdensome contractual conditions on the seller, including selling agricultural and food products at prices below the cost of production‘ (draft decree referred to in footnote 1, Article 5.1.b). The government has therefore removed the uncertain notion of ‘patently‘ below-cost prices, a sure source of frustration and litigation.
The administrative fine to be imposed on the buyer is indeed dissuasive, ranging from a minimum of 10,000 euros up to 3 percent of the turnover achieved in the last fiscal year prior to the assessment. And ‘the measure of the penalty shall be determined by reference to the benefit received by the offending party as well as the extent of the harm caused to the other party‘ (Article 10.6).
Criticality 1. Producer organizations and cooperatives
The exclusion of POs and cooperatives from the application of the rules under consideration is the first, serious critical issue to be resolved:
– Excluding from the notion of ‘contract of sale‘ the supplies of agricultural enterprises to producer organizations (POs) of which they are members is in clear conflict with theUnfair Trading Practices (UTPs) directive, EU dir. 2019/633,
– Excluding member farmers’ contributions to cooperatives in turn undermines the achievement of the directive’s objectives, especially in a country like Italy where the cooperative world is a major player. (3)
In fact, the resulting distortion of competition – in favor of producers’ organizations and agricultural cooperatives – results in the ability attributed to them to pay below cost and late, or apply other vexatious practices against their own members. Who are therefore discriminated against compared to other farmers. A legal and social abomination. (4)
Criticality 2. ICQRF
Giving ICQRF the role of competent authority once again answers the delusion of omnipotence of those who have always governed agricultural policies in Italy. Not the ministers on duty but the head of the Coldiretti chiefs, who by the way had already hatched a series of agreements to disapply the UTPs directive in various parts. (5) And the numbers, of course, do not add up.
The ICQRF-with 791 staff, also engaged in 5 analytical laboratories and 1 central laboratory for review and research-is now in charge of controls on:
– geographical indications (PDO, PGI, TSG, DOC, DOCG), organic production, agri-food fraud,
– Consumer information on food products, (7)
– feed, protective measures against plant pests. (8)
The above controls affect more than 3 million enterprises in Italy and pertain to technical standards. How can it be believed that the same 791 officials can also deal with contracting and business practices, interacting, among other things, with competent authorities in other member states (Art. 11)? With what resources, specific skills and training, without ‘new or increased burdens on public finance‘ (Art. 13)?
‘The world is not threatened by people who do evil, but by those who tolerate it‘ (Albert Einstein)
Dario Dongo
Notes
(1) Draft legislative decree transposing EU Directive 2019/633. Latest draft available at https://www.agricolae.eu/wp-content/uploads/2021/11/decreto-legislativo-pratiche-sleali.docx
(2) Dario Dongo. Unfair trade practices, green light for sales below cost. GIFT(Great Italian Food Trade). 10/27/21, https://www.greatitalianfoodtrade.it/mercati/pratiche-commerciali-sleali-via-libera-alle-vendite-sottocosto
(3) Dario Dongo. Unfair trade practices, Italy tries to exclude cooperatives and producer organizations. GIFT(Great Italian Food Trade). 17.10.21, https://www.greatitalianfoodtrade.it/idee/pratiche-commerciali-sleali-litalia-prova-a-escludere-cooperative-e-organizzazioni-dei-produttori/
(4) On 6.10.21, the UN Working Group on Business and Human Rights noted ‘numerous ways in which workers, particularly migrant workers, are exploited and underpaid for long hours of work. (…) through agencies or cooperatives that employ illegal or unethical recruitment practices.’ V. OHCHR (2021). Statement at the end of visit to Italy by the United Nations Working Group on Business and Human Rights, https://www.ohchr.org/FR/HRBodies/HRC/Pages/NewsDetail.aspx?NewsID=27607&LangID=F
(5) Dario Dongo. Unfair trade practices, double-down supply chain agreement. GIFT (Great Italian Food Trade). 7.3.21, https://www.greatitalianfoodtrade.it/mercati/pratiche-commerciali-sleali-accordo-di-filiera-al-doppio-ribasso
(6) Dario Dongo. Unfair trade practices in the agribusiness supply chain, the protections that are missing. GIFT(Great Italian Food Trade). 4/26/21, https://www.greatitalianfoodtrade.it/idee/pratiche-commerciali-sleali-nella-filiera-agroalimentare-le-tutele-che-mancano
(7) Reg. EU 1169/11, d.lgs. 231/17
(8) Dario Dongo. Official controls, d.lgs. 27/21. Implementation of reg. EU 2017/625. GIFT (Great Italian Food Trade). 14.3.21, https://www.greatitalianfoodtrade.it/sicurezza/controlli-ufficiali-d-lgs-27-21-attuazione-del-reg-ue-2017-625
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
