The dog panettone, ‘Canettone,’ is launched this Christmas at a price 20 times higher than the traditional ‘human’ cake. It is just a symptom of this poor Italy. Revolution is necessary, and it goes far beyond that.
One wonders how it is possible that an authentic Italian panettone can be sold at ~2.5€/kg , while a Canettone sells for ~47.2€/kg. Without any rhetoric, rather some reflections on the market and its players.
Canettone, Christmas phenomenon in a thriving market
The first response to the formidable price of dog candy could in itself silence any further debate, of Canettoni there is one, of Panettoni at least 31. And it is obvious-if execrable-the law of the market that causes the price of the rarest items to rise, lowering that of the most popular goods.
The Canettone is an original idea but not a new one. The writer (Vito Gulli) was marketing director of a leading pet food group in the early 1980s where a lot of research and development was done. It also happened to bring home some dog treats, put them in a nice pastry cabaret and offer them after lunch to the gluttons at home. The father and father-in-law greatly appreciated those soy lecithin-based chocolates, except to become angry when they learned that they were designed for dogs, despite being ‘food grade.’
At that time, the Italian market was not yet ready for the ‘dolcinophilic’ avant-garde, which, on the other hand, was already widespread in Holland and England. At that time, the total ‘dog food‘ market was 80 percent fueled by ‘table scraps,’ that is, leftover daily meals from consumers who still could not afford to devote too many resources to their pets.
Today, however, as we learn on the Canettone company’s website, requests are so high that delivery by Christmas cannot be assured. The ‘pet food‘ market is advancing with the wind in its sails, without, among other things, the regulators having yet begun to protect consumers from the frauds that cloud it.
Panettone, Christmas phenomenon in a depressed market
The figure that should really be of concern is not the Canettone to the stars but the panettone to the stables. The quintessential Christmas dessert, with fine ingredients in legally defined quantities, is at rock-bottom prices even before the holidays.
The supply is wide and the competition fierce, and there are those who try to distinguish themselves with initiatives of even dubious legitimacy, such as ‘lactose-free,’ to try to escape the bloody price battle. But at the end of the day on the field we count the casualties, of which it would be far better to do without.
The dictatorship of price inevitably forces people to abandon traditions, break down the quality of raw materials, and trivialize products with available technologies. Working conditions worsen–the Italpizza case, beyond consideration, may find a key in that as well–and factories, sooner or later, blow up.
The machete of low cost as a combat weapon is bound to mow down the food production fabric, which in Italy is sustained by quality productions rooted in territories, difficult when not impossible to convert into economies of scale capable of competing on large numbers with Big Food giants.
The price drug and its pushers
In this fight to the death, big business always wins. Or at least he thinks he is winning, in a short-sighted view of the short term that is nevertheless useful in scoring victories on the profit and loss accounts and production bonuses to high-ranking executives. However, the price drug and the financial drift of industrial and distribution activities have noteworthy side effects.
Unfair business practices of the large-scale retail sector-to date unpunished, despite the efforts of the writer (Dario Dongo) in drafting Article 62 in its original text-and the inordinate promotional intensity of operators with the largest financial lungs are stifling food production in Italy, which is dotted with tens of thousands of businesses on the ground.
This triggers a vicious cycle of suffering that neither the public nor the private system is able to mitigate. Bankruptcies and bankruptcy proceedings, plant closures, layoffs of workers and employees, and the collapse of ancillary industries inevitably result in the widespread impoverishment of the masses. And when even the giants have prevailed, few will be able to purchase their goods and services as domestic demand will be lowered.
The drug of price reaps addictions, and it is not easy to attribute responsibility to its co-participants. Victims become part of the vortex and become pushers in turn. Thus manufacturers founder in the spiral of low price and low quality, distribution participates with every useful tool to absorb its own pockets of inefficiency – yet fails to defend itself against the globalecommerce giants.
ConsumAtors in turn are struggling to assume awareness and responsibility for their role as independent market leverage. They, indeed we, can influence the supply to a great extent. Italian consumAtors’ stance against palm oil has proven this power. Other examples occur on the animal welfare front, with the push on eggs from free-range hens. And with the democratization of the
bio. But it is not enough.
Every man for himself
Theintegrity of the supply chain. We need to restart from the local and equitable dimension that produces value on the ground, demand ethics instead of exploitation, reward respect for the environment and biodiversity.
If manufacturers are responsible for the race to low cost-chasing down costs, then eventually relocating (first costs, then factories, and finally fiscal locations)-distributors, who triggered the spiraling stimulus, are perhaps even more so. Without realizing that they themselves, in focillating the price battle, are arming the hand of their killer: unemployment in their territory, thus the lack of purchasing power. Full shelves and checkouts with no lines, indeed supermarkets just empty. And they, unlike the manufacturers, are the only ones who can never relocate their outlets.
The GDO persists in maintaining an overly harsh and imposing attitude toward the production chain. Essentially aiming to lower prices more and more, regardless of cyclical increases-even significant increases-in commodity costs.
All this forces most Italian companies, mostly SMEs and microenterprises, to face unsustainable business costs in the medium to long term. If distributors were not so short-sighted, they would look beyond short-term goals, giving up some extra margin to avoid giving it all up in the years to follow.
The system does not hold. The suffocating hegemony of distributors-though within the confines of a still de facto permissible competition, pending the new directive on unfair trade practices-cannot continue in this way, without the tragic scenario described taking place.
Save us who must
A glimmer of hope was glimpsed in Italy last June. When Federdistribuzione, Conad and other brands signed a Code of Ethics for the purchase of agricultural and food products. In line with Coop Italy’s previous commitments. The madness of double-drop auctions was thus halted in time, thanks to the widespread mobilization of NGOs and unions. But it is still too little.
Politics must play its part. In Europe, where the definition of theUnfair Trading Practices (UTPs) directive, for which Hon. Paolo De Castro is rapporteur in Strasbourg, is expected soon-under the Romanian Council presidency (1st half of 2019)-is expected. And in Italy, where it is necessary to bring back to life the requirements of Article 62 of Law 27/12 by entrusting controls to the initiative of the Guardia di Finanza. For it is the duty of politics to balance time between the just advancement of progress and the necessary re-planning of work.
Nobody say ‘it’s the market, baby!’ Because the infamous ‘invisible hand’ has already shown the ropes, indeed the noose for so many, too many, everyone. The scissor of social inequality has widened as never before, to the point of undermining the very foundation of civil society, people’s access to resources essential to life. And that is why politics must step in and respond, ‘it’s politics, beauty!’
Then there is the antitrust. Which is primarily concerned with competition, but has not yet encountered Great Italian Food Trade’s complaint last April about Amazon’s extortionate business practices against suppliers. This legitimizes the continuation of abuses and the flourishing of the giga-business that shreds workers and exports our wealth without leaving a single euro to our Treasury.
The revolution is necessary and urgent; it must start from everyone’s conscience. #Égalité!
Vito Gulli and Dario Dongo
Notes
(1) The original text of Article 62, in prohibiting every unfair business practice of which an illustrative and non-exhaustive list was provided, entrusted the GdF with the ex officio power of initiative, investigation and sanction. This would have enabled the effective banning of such practices. When the decree law was converted, however, controls were entrusted exclusively to the Antitrust Authority, with the result that the new rules were disapplied, outside of only the payment terms (also extended, when the decree law was converted) defined therein. For more details see the free ebook ‘Article 62, a revolution?” at https://ilfattoalimentare.it/ebook-articolo62. See also https://ilfattoalimentare.it/articolo-62-regolamenti-filiera.html
Entrepreneur of 'humanist' extraction, he is famous for having led Generale Conserve SpA, known for the ASDOMAR brand, from 2001 to 2017. He has always invested in Made in Italy, its supply chains and its workers, to whom it still dedicates its commitment and free thought. Also in the role of Federalimentare arbitrator
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
