Extra virgin olive oil: the minister has ‘realised’ that it is being sold below cost by Italian retailers. This has been going on for ages, but better late than never.
The problem is that, at the same time, the mechanism for controlling the price of wheat is being dismantled
“The Lazio Regional Administrative Court has annulled ISMEA’s monitoring of wheat production costs, upholding the appeal lodged by Italmopa [Confindustria] and the leading milling companies. The reasoning is legal, but the effect is entirely political and economic: one of the few tools capable of certifying, in black and white, that many farmers are selling wheat below cost has disappeared”.
This is the complaint made by Paolo Caruso and other industry experts on LinkedIn.
So, instead of making progress in curbing unfair practices(notably selling below cost and online auctions seeking the lowest price) and taking steps forward by monitoring prices and margins across the various supply chains, we have taken several steps backwards.
And there has been no reaction whatsoever from trade union representatives such as Coldiretti or Confagricoltura.
It is unlikely that large-scale retailers will respect the olive oil sector if they allow milling companies to get away with anything.
In Italy, as we know, nobody does anything without strict regulations and heavy penalties.
A number of conclusions can be drawn from this situation:
1) Selling below cost is not, as many might have us believe, solely a problem for large-scale retailers: it is a system involving producers, distributors (including those supplying the catering sector, such as Marr) and institutions.
2) The failure to tackle unfair practices creates numerous market distortions that skew costs, prices and margins. And this runs directly counter to the protection of sovereignty that this government would seem to advocate: Italian farmers are being weakened by this situation.
