Italy to prohibit the sale of extra virgin olive oil below cost

The Italian gov­ern­ment has approved a bill imple­ment­ing European Directive 2019/633 on unfair trad­ing prac­tices in busi­ness-to-busi­ness rela­tion­ships in the agri­cul­tural and food sup­ply chain. Aimed at “ratio­nal­iz­ing and strength­en­ing the cur­rent legal frame­work towards greater pro­tec­tion of sup­pli­ers and oper­a­tors,” the law pro­hibits com­pa­nies from impos­ing bur­den­some con­trac­tual con­di­tions. “The trend towards ever-lower prices can fur­ther­more deter­mine a gradual decrease in the prof­itabil­ity of oper­a­tors, mak­ing it less con­venient to grow olive trees, pro­duce, and pack­age extra vir­gin olive oil,” says Anna Cane, olive oil group pres­i­dent at Assitol. It also for­bids the sale of agri­cul­tural and food prod­ucts at prices below pro­duc­tion costs, which is likely to affect the olive oil sec­tor.

“Thanks to this reg­u­la­tory instru­ment, the rela­tions within the olive oil sup­ply chain can be smoother,” Anna Cane told Olive Oil Times. “This pre­pares the ground to relaunch our action against the below-cost sell­ing of extra vir­gin olive oil in large dis­tri­b­u­tion chan­nels that our sec­tor has been try­ing to achieve for years”.

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Assitol has already pre­sented a pro­posal to the Italian and European author­i­ties call­ing for a ban on sell­ing extra vir­gin olive oil below cost along with appro­pri­ate admin­is­tra­tive sanc­tions.

“We hope that both national and European author­i­ties will pay atten­tion to this issue soon,” Cane said. “This is not only an Italian prob­lem but also involves the major­ity of large dis­tri­b­u­tion chan­nels on a global level”.

OLIVE OIL: THE SITUATION IN ITALY

The cur­rent leg­is­la­tion in Italy allows for extra vir­gin olive oil to be sold at a lower price than its cost only once a year, but some large retail­ers sell their extra vir­gin olive oil below cost out­side of this period.

“This causes a degra­da­tion of the prod­uct, con­vey­ing the idea that the extra vir­gin olive oil is a com­mod­ity of mod­est value,” Cane said. “The trend towards ever-lower prices can fur­ther­more deter­mine a grad­ual decrease in the prof­itabil­ity of oper­a­tors, mak­ing it less con­ve­nient to grow olive trees, pro­duce, and pack­age extra vir­gin olive oil. The risk is that the end-con­sumer price, in most cases, does not cover the pro­duc­tion costs,” she added. “This does not make sense since this product is one of our key export prod­ucts and is highly appre­ci­ated for its health value”.

The Italian Ministry of Agriculture expressed sat­is­fac­tion over the bill, empha­siz­ing that thanks to this mea­sure, “the power rela­tions between the par­ties in the com­mer­cial exchanges are defin­i­tively rebal­anced, guar­an­tee­ing a more equi­table posi­tion for pro­duc­ers and farms harmed by the unsus­tain­able prac­tice”.

A com­plaint form shall be made avail­able on the Ministry’s web­site for report­ing cases. The cen­tral Inspectorate for the pro­tec­tion of qual­ity and fraud pre­ven­tion of agri-food prod­ucts (ICQRF) is des­ig­nated as the super­vi­sory author­ity.

“The decree against unfair com­mer­cial prac­tices can open the door to other mea­sures that be use­ful for restor­ing prof­itabil­ity to the world of olive oil,” Cane con­cluded. “We now ask all the stake­hold­ers of the sup­ply chain to share our com­mit­ment against the below-cost sales”.