Powers over supervision and sanctions of unfair trade practices in the agribusiness sector were transferred – through Legislative Decree. 198/2021, repealing Article 62 of Law 27/2012-from the Antitrust Authority to the ICQRF.
However, the UTPs(Unfair Commercial Practices) directive is in danger of not being implemented in Italy, just when production costs have skyrocketed and market tensions threaten the survival of farmers and businesses. (1)
We return to this topic-already addressed in previous articles (2,3)-in the hope that someone will decide to address it today in Italy, without having to wait for the European Commission’s censures, which would be too late anyway.
1) Unfair trade practices in the agribusiness supply chain.
1.1) Vicious circles
Unfair trade practices-which find their natural place of realization in negotiation and thus in the bilateral or plurilateral relationship between the parties to the economic agreement-dramatically impact competition in agricultural and food supplies. In fact, production is pulverized into 415,000 active agricultural enterprises (of which 60.5 percent have no employees) and 56.3,000 processing enterprises (of which 99 percent are SMEs), as seen. (4)
The market is drugged by price, which in some industries often falls below production costs. Under the condition of working, or padding quotas to the competition, the ‘highest bidder’ goes under. Except perhaps then triggering vicious circles that explain-but do not justify-caporalism and other crimes (5,6). Systemic imbalances (macroeconomic dimension) therefore arise from-and are nurtured, at the same time-by inequitable bargaining relationships (microeconomic dimension).
1.2) Poor supervision
Ten years of (merely theoretical) application of Article 62 have seen the AGCM:
– conduct only a couple of investigations into unfair trade practices in the agribusiness supply chain, with sanctions late and insignificant even in the face of clear abuses of economic dependence (7.8),
– deliberately refrain from proceeding on cases of significant impact on the national market, such as the one we (Dongo) reported on Amazon’s abusive practices (9,10).
In fact, the Antitrust Authority still struggles to recognize the value of rules that-as an exception to bargaining autonomy-aspire to protect the quintessential weak contractor, the agricultural and food supplier. (11)
2) Competencies and priorities
The shift of competencies to supervision and control of unfair trade practices, from Antitrust to ICQRF, could be explained by noting the 10 years of inediacy of the Competition Authority, as mentioned above.
The discretion expressed by AGCM in dismissing resounding cases such as Amazon, after all, was motivated in terms of ‘political priorities’. (10) Therefore, an analysis of the competencies and resources of the two authorities appears essential.
2.1) Antitrust, the competencies
After all, the Antitrust Authority-nomen ipsum, Autorità Garante per la Concorrenza e il Mercato (AGCM)-has primary competence in the protection of markets, under the particular profile of competition protection. Which is also relevant in cases of abuse of dominant position, not unlike the manifest imbalances of bargaining power between small suppliers and large buyers of agricultural and food commodities.
The AGCM is also charged with protection and guarantee functions on profiles that are to some extent related to the higher, cross-cutting mission of competition protection. With particular regard to consumer protection, expressly entrusted to it by the Consumer Code (Legislative Decree 206/2005. See notes 12,13). And yet-as seen in the previous section-it has not developed sensitivity to the entirely unique problems of the agribusiness supply chain.
2.2) ICQRF, competencies and resources.
ICQRF – the Central Inspectorate for Quality Control and the Repression of Food Fraud, at the MiPAAF – has collected, in recent years, a number of competencies on public controls in the agri-food chain that has not been matched by any increase in staffing and competencies, today standing still at about 360 inspectors (graduates and undergraduates).
I d.lgs. 231/17 e 27/21 have loaded ICQRF with the extraordinary responsibilities of overseeing the implementation of the Food Information Regulation (reg. EU 1169/11) and overseeing relations with the European Risk Analysis Network, under reg. EU 2017/625(Official Controls Regulation. See notes 14, 15). With the paradox, in both cases, of the financial invariance clause.
3) Interim Conclusions.
Italy-like Europe and the entire planet (16)-is about to face the most severe food security crisis ever observed since World War II. In immediate succession to the Covid pandemic that in turn triggered the most severe economic crisis in the last century.
The agribusiness chain plays a pivotal role in the economy and employment of the system-Country, which ranks second and third in Europe for agricultural and food production, respectively. The control of market balances and imbalances, both micro and macroeconomic, cannot be neglected as it still is.
Dario Dongo and Maria Rosaria Raspanti
Notes
(1) Dario Dongo. Food security, thesis and antithesis of the European Parliament. GIFT(Great Italian Food Trade). 3/27/22, https://www.greatitalianfoodtrade.it/idee/food-security-tesi-e-antitesi-del-parlamento-europeo
(2) Dario Dongo. Unfair trade practices in the agribusiness supply chain, Leg. 198/2021. ABC. GIFT (Great Italian Food Trade). 26.2.22 https://www.greatitalianfoodtrade.it/mercati/pratiche-commerciali-sleali-nella-filiera-agroalimentare-d-lgs-198-2021-l-abc
(3) Dario Dongo. Unfair trade practices, the woes of Leg. 198/2021. GIFT (Great Italian Food Trade). 4.12.21, https://www.greatitalianfoodtrade.it/mercati/pratiche-commerciali-sleali-i-guai-del-d-lgs-198-2021
(4) 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
(5) Dario Dongo. Attianese, in addition to tomato origin fraud, corruption and caporalato. GIFT(Great Italian Food Trade). 9.3.22, https://www.greatitalianfoodtrade.it/mercati/attianese-oltre-alla-frode-sull-origine-del-pomodoro-la-corruzione-e-il-caporalato
(6) Dario Dongo. Corporalism and fraud, Spreafico SpA under judicial administration. What about due diligence? GIFT (Great Italian Food Trade). 9.10.21, https://www.greatitalianfoodtrade.it/mercati/caporalato-e-frodi-spreafico-spa-sotto-amministrazione-giudiziaria-e-la-due-diligence
(7) Dario Dongo. Sardinian shepherds and unfair trade practices, derisory Antitrust sanctions on F.lli Pinna and 5 other dairies. GIFT(Great Italian Food Trade). 7/31/21, https://www.greatitalianfoodtrade.it/mercati/pastori-sardi-e-pratiche-commerciali-sleali-sanzioni-irrisorie-dell-antitrust-a-f-lli-pinna-e-altri-5-caseifici
(8) See cases AL22 – Marketing of Senatore Cappelli wheat, (AGCM Order 12.11.2019 No. 27991), AL15E – AUCHAN-GDO/Panificatori, at https://www.agcm.it/competenze/tutela-della-concorrenza/delibere/
(9) Dario Dongo. Amazon, cyberbullying. GIFT(Great Italian Food Trade). 4/24/18, https://www.greatitalianfoodtrade.it/consum-attori/amazon-cyber-bullismo
(10) See last paragraph of ‘Ecommerce, the Digital Far-West‘ in D.Dongo. Amazon, new complaints to Antitrust and ICQRF. GIFT (Great Italian Food Trade). 7.2.19, https://www.greatitalianfoodtrade.it/consum-attori/amazon-nuove-denunce-a-antitrust-e-icqrf
(11) See most recently Antitrust Opinion 22.12.21 on Memorandum of Understanding of the National Dairy Industry to Safeguard Italian Dairy Farms (AS1815). https://www. agcm.it/competenze/tutela-della-concorrenza/attivita-di-segnalazione/lista-segnalazioni-e-pareri
(12) Maria Rosaria Raspanti (2015). The new arrangement of jurisdiction over unfair trade practices: ‘Reddite quae sunt Auctoritatis Auctoritati’. Competition and the market.
(13) Maria Rosaria Raspanti (2016). The division of responsibilities on unfair trade practices: last act? The New Administrative Law
(14) V. Dario Dongo. 1169 PENIS. Free e-book on crimes and penalties in food. GIFT (Great Italian Food Trade). 3/25/18, https://www.greatitalianfoodtrade.it/libri/1169-pene-e-book-gratuito-su-delitti-e-sanzioni-nel-food
(15) Dario Dongo, Amaranta Traversa, Sarah Lanzilli, Claudio Biglia. Official controls, d .lgs. 27/21. Implementation of EU reg. 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
(16) Anuradha Raghu, Pratik Parija. Soaring Prices Are Changing the Way People Eat. Bloomberg news. 3/28/22, https://www.bloomberg.com/news/articles/2022-03-28/rising-food-prices-could-spell-social-unrest-demand-destruction-and-less-bacon
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
