Food System

Unfair trade practices, the woes of Leg. 198/2021

December 4, 2021

On Dec. 15.21, the Legislative Decree finally comes into force. 198/2021 implementing EU dir. 2019/633 on unfair trade practices in agri-food supply chains. (1)

The most serious risk is the disapplication of a law whose supervision is entrusted to a body, ICQRF, which is completely lacking the necessary resources. (2)

Agricultural enterprises that are members of cooperatives and producer organizations remain excluded from any protection, as do farmers subject to framework trade agreements. (3)

Doing worse was not easy, but the magic circle that governs agribusiness policies in Italy succeeded very well.

Table of Contents

Unfair trade practices, controls under Leg. 198/2021

Legislative Decree. 198/21 designates the ICQRF as the national authority to combat unfair trade practices in the agribusiness supply chain (Article 8). Therefore, the Central Inspectorate of Quality Protection and Fraud Repression of Agri-food Products has the tasks of:

– ascertain the existence of clauses or contractual relationships that differ from the criteria indicated in Articles 4,5,6 of the decree itself, in the supply of agricultural and food commodities, and

– Apply the corresponding administrative penalties, in accordance with the procedures set forth in Law 689/1981. With the sole exception of sales below cost (Art. 7), supervision of which is instead the responsibility of the Antitrust Authority.

ICQRF, 360 inspectors for 3 million enterprises

Enforcement, in Italy at least, depends only on the effectiveness of controls and the deterrence of penalties. And the decision to entrust the supervision of unfair trade practices to ICQRF-with the usual financial invariance clause (Art. 13)-is the premise for de facto disapplication of this legislation as well.

In fact, the ICQRF has about 360 inspectors, including graduates and undergraduates. Who are already overburdened due to the exclusive competence to controls on the Food Information Regulation (EU reg. 1169/11, Legislative Decree 231/17), which in Italy applies to about 3 million businesses.

Each pair of inspectors is expected to supervise 16,700 operators each year, 1,400 each month, to check millions of labels, websites, agricultural enterprises and production facilities, importers, distributors and public traders. In addition to quality schemes, GMOs and organic supply chains, fraud also on imported goods. All we needed were contractual relations.

Farmer members of cooperatives and producer organizations, no protection

The scope of application of Leg. 198/21 concerns the ‘supplies of agricultural and food products, carried out by suppliers who are established in the national territory, regardless of the turnover of the suppliers and buyers. Does not apply to transfer contracts directly concluded between suppliers and consumers‘ (Article 1).

However, they remain excluded from the very notion of ‘contracts of assignment‘ – and thus, unjustifiably, from the protection of weak contractors – ‘contributions of agricultural and food products by farmers and fishermen to cooperatives of which they are members or to producer organizations, pursuant to Legislative Decree No. 27 of May 2005, no. 102, of which they are members‘ (Art. 2.e).

Criticality

‘IsEurope asking us to do this‘? False. Instead, the European legislature has prescribed the strict implementation of theUnfair Commercial Practices (UTPs) directive, which it is doubtful will be able to be achieved through ICQRF, for the aforementioned reasons. The Antitrust Authority in turn has been completely ineffective in supervising the market and enforcing the fateful Article 62 of Law 27/2012 (4,5).

The Italian agrifood production chain-fragmented like no other in Europe, we have seen (6)-needs effective enforcement against unfair trade practices. The exclusion of producer organizations from the rules under consideration is inadmissible because it is contrary to EU Directive 2019/633. And it is beyond inconvenient to exclude cooperatives.

Waiting to see what Europe, which last week imposed a 20 million euro fine on just one large Italian cooperative, Conserve Italia, for violating competition rules, will really demand.

Dario Dongo

Notes

(1) Legislative Decree. 8.11.21, n. 198. Implementation of Directive (EU) 2019/633 on unfair business-to-business commercial practices in the agricultural and food supply chain as well as Article 7 of Law April 22, 2021, no. 53, on the marketing of agricultural and food products. https://www.gazzettaufficiale.it/eli/id/2021/11/30/21G00202/sg

(2) Dario Dongo. Unfair trade practices and the European delegation law, critical analysis. GIFT(Great Italian Food Trade). 4/24/21, https://www.greatitalianfoodtrade.it/pratiche-commerciali-sleali-e-legge-di-delegazione-europea-analisi-critica

(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) Dario Dongo, Guido Cortese. Sardinia, Antitrust investigates milk and pecorino cheese prices. Some market data. GIFT (Great Italian Food Trade). 19.2.19, https://www.greatitalianfoodtrade.it/mercati/sardegna-l-antitrust-indaga-sui-prezzi-di-latte-e-pecorino-alcuni-dati-di-mercato

(5) Elena Bosani, Dario Dongo. Sardinian shepherds and unfair trade practices, derisory Antitrust sanctions on F.lli Pinna and 5 other dairies. GIFT(Great Italian Food Trade). https://www.greatitalianfoodtrade.it/mercati/pastori-sardi-e-pratiche-commerciali-sleali-sanzioni-irrisorie-dell-antitrust-a-f-lli-pinna-e-altri-5-caseifici

(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