Italy: Antitrust investigation into retail sector

Background: food inflation and power imbalances

The measure by which Antitrust launched the fact-finding investigation into retail is based on the following considerations:

• food inflation. Over the past four years, from October 2021 to October 2025, food prices in Italy have increased by 24.9%, almost eight percentage points more than the general consumer price index (+17.3%);

• within food products, price growth has been decidedly more marked with reference to the unprocessed products sector until September 2025, whilst in the last two months a reversal of the trend appears to have occurred;

• ‘in light of the described increases in consumer prices, agricultural producers often lament a compression or, at the very least, an inadequate growth of their margins, which could be partly attributable to the strong imbalance of bargaining power of farmers compared to the large chains of organised large-scale distribution‘.

Antitrust highlights how at the upstream end of the agri-food supply chain there is an extremely fragmented production base, composed of several thousand suppliers. Also noting the ‘strong structural delay in the growth of the size of national agricultural enterprises and in the establishment of Producer Organisations and Associations of Producer Organisations, instruments specifically identified within the Common Agricultural Policy to enable agricultural producers to increase their bargaining power, improve collective efficiency and develop more balanced partnerships with distribution‘.

At the downstream end of the supply chain, conversely, ‘the final distribution sector is characterised by a rather high and growing level of concentration over time, which could enable retail chains to unilaterally impose the economic and operational conditions of supply, securing and retaining profit margins “unjustifiably” higher than those recognised to their suppliers‘.

Value chain structure and the evolution of retail

In this context, the Authority considers ‘worthy of investigation to examine the role played by retail in the distribution of added value along the agri-food supply chain and in final price formation. In particular, in this context, the way in which modern distribution chains exercise their bargaining power in the purchasing phase (buyer power) is significant, from which derive the level of remuneration of activities upstream of the production chain and, depending on the mechanisms of downstream transmission of cost savings, the level of final prices‘.

Antitrust considers the ‘process of profound structural and organisational transformation‘ underway in the retail sector, and sets as its ‘main objective that of verifying to what extent, and by what methods, the ongoing evolution of the sector has repercussions on the methods of exercising retail’s purchasing power towards its suppliers and on the competitive confrontation between operators, given that supply chain optimisation strategies represent one of the main competitive levers of distribution chains‘.

Multi-level negotiation and remuneration of sales services

Therefore, ‘of particular relevance from a competition standpoint is the fact that retail chains exercise their purchasing power also through various and varied forms of non-corporate aggregation, which often develop on multiple levels (cooperatives, central buying groups and super-central buying groups), to which correspond as many levels of negotiation with the same supplier (super-central, central, cooperative, individual operator)‘.

‘The bargaining power of retail chains towards their suppliers is also exercised in the context of negotiating payments that suppliers themselves are required to pay back to distribution companies as consideration for the purchase of sales services such as, for example, listing, methods of product shelf placement, promotions, new product launches, etc. (the so-called trade spending)’.

The fact-finding investigation will therefore include:

• ‘a mapping of the different purchasing organisations active in the sector, analysing their functions, degree and forms of coordination activated‘;

• ‘the role played in defining overall purchasing conditions and in the consequent formation of final prices‘, with analysis of the characteristics and impact of ‘contribution flows paid for promotional and sales services, generally negotiated concurrently with purchasing conditions, also in order to assess their suitability to remunerate services actually requested by the supplier and concretely provided by the chains’.

Private label

In analysing the negotiating relationships between retail chains and suppliers of agri-food products, Antitrust Italy also attaches great importance to the issue of retailer’s own brand products, the so-called private label (PL). These in 2024 recorded a turnover increase of more than 2.4% compared to 2023, +35.4% compared to 2019, ‘and have an increasing impact on the assortments of chains, further strengthening their bargaining power towards their suppliers. With the latter, in fact, in addition to the traditional vertical type of contractual relationship, a direct competition relationship of a horizontal type also arises. In this regard, the circumstance that the management of purchasing and marketing of PLs, which represents an important strategic lever of downstream competition among retail operators, is generally delegated to purchasing centres is significant‘.

Antitrust therefore intends to examine in depth the role and importance of private label products, ‘with particular reference to their impact on assortment, the type and characteristics of suppliers, the purchasing conditions by chains and the subsequent price positioning on downstream consumer markets‘.

Antitrust fact-finding investigation

The Italian Competition Authority has thus resolved to ‘proceed with launching a fact-finding investigation into the agri-food supply chain and retail, with particular reference to the themes mentioned above‘. The closing date of the investigation is set for 31 December 2026.

Within the short deadline of 31 January 2026, any interested party may provide contributions to the investigation, with particular regard to:

• ‘any critical issues relating to the methods of exercising purchasing power by retail operators, also with particular reference to those sectors – typically represented by fresh products ready for consumption – where a greater imbalance of bargaining power in favour of purchasers is found;

• any inefficiencies, malfunctions or competitive critical issues connected to the existence of different levels of aggregation among retail operators in the purchasing phase;

• any specific critical issues, inefficiencies or lack of transparency present in the negotiation and management of trade spending, that is, the flow of contributions paid to retail operators for the remuneration of promotional and sales services;

• opportunities and difficulties for producers connected to the supply of retailer’s own brand products (PL or MDD);

• any anomalies in functioning or critical issues encountered in the mechanism of downstream transfer, by retail operators, of price fluctuations of production inputs and any cost savings obtained in the procurement phase‘.

Our FARE team www.fareagrifood.com and its network of professionals expert in the matter is available to operators who wish to receive support for participation in the investigation in question, also in confidential form.

Dario Dongo

Cover art copyright © 2025 Dario Dongo (AI-assisted creation)

References

• Autorità Garante per la Concorrenza e il Mercato (AGCM). Indagini conoscitive 207 IC58 – GDO e filiera agroalimentare. Provvedimento n. 31773. Bollettino settimanale 22.12.25 n. 49