Italian Antitrust Probe Targets Supermarket Pricing Practices Affecting Farmers

Summary

The Italian Competition Authority is inves­ti­gat­ing the mar­ket prac­tices of large food retail­ers and their impact on farm­ers, focus­ing on rela­tion­ships between retail­ers and sup­pli­ers, trade spend­ing, and pric­ing strate­gies, par­tic­u­larly for olive oil. The inves­ti­ga­tion aims to deter­mine how cur­rent prac­tices affect com­pe­ti­tion, trans­parency, and income dis­tri­b­u­tion along the agri-food sup­ply chain, with stake­hold­ers encour­aged to sub­mit obser­va­tions to the AGCM by the end of the year.

The Italian Competition Authority (AGCM) has entered a new phase in its ongo­ing inves­ti­ga­tion into the mar­ket prac­tices of large food retail­ers and their impact on farm­ers.

At the request of the antitrust watch­dog, food and olive oil trade asso­ci­a­tions, farmer unions and other stake­hold­ers sub­mit­ted their obser­va­tions by a January dead­line.

Olive oil farm­ers and pro­duc­ers are among those most affected by the inquiry, as super­mar­ket shelves fre­quently fea­ture olive oil at very low prices.

Such pric­ing strate­gies, often pre­sented as spe­cial offers, rely on the product’s pop­u­lar­ity and use olive oil as mar­ket­ing bait to attract cus­tomers.

More specif­i­cally, the AGCM’s lat­est inves­ti­ga­tion high­lights that aver­age food prices rose nearly 25 per­cent over the past four years, sig­nif­i­cantly out­pac­ing gen­eral infla­tion, which stood at 17.3 per­cent.

In 2025, food prices rose 2.3 per­cent year-on-year, com­pared with a 1.2 per­cent increase in over­all infla­tion. These dynam­ics, how­ever, did not trans­late into ben­e­fits for farm­ers, whose mar­gins often remain too slim to cover pro­duc­tion costs.

The probe for­mally focuses on rela­tion­ships between large food retail­ers oper­at­ing in Italy and their sup­pli­ers, with con­trac­tual agree­ments seen as cen­tral to deter­min­ing food prices and agri­cul­tural income.

In par­tic­u­lar, AGCM is exam­in­ing the con­trac­tual power exer­cised by large retail­ers dur­ing pro­cure­ment, often through cen­tral­ized, large-scale pur­chas­ing oper­a­tions.

Another area under scrutiny is trade spend­ing, refer­ring to pay­ments sup­pli­ers make to retail­ers for prod­uct list­ing, pro­mo­tions and shelf vis­i­bil­ity.

In 2024, pri­vate-label food prod­ucts, includ­ing olive oil, which are heav­ily pro­moted by super­mar­kets, recorded a 35.4 per­cent increase in turnover com­pared with 2019.

The inves­ti­ga­tion aims to deter­mine whether and to what extent cur­rent large-scale retail prac­tices affect com­pe­ti­tion, trans­parency and the dis­tri­b­u­tion of income along the agri-food sup­ply chain.

AGCM offi­cials are expected to deliver their con­clu­sions by the end of the year.

As super­mar­kets and pro­mo­tional offers dom­i­nate Italian food sales, the CIA – Italian Farmers Association has denounced what it describes as per­sis­tently neg­li­gi­ble earn­ings for grow­ers.

“A trans­parency ini­tia­tive is needed. Consumers must know the ori­gin of the prod­uct, the ori­gin of the raw mate­r­ial and the value rec­og­nized to farm­ers,” CIA President Gennaro Sicolo wrote in a note to Olive Oil Times.

“Consumers must know how much the raw mate­r­ial is paid to pro­duc­ers, what con­sti­tutes a fair income for proces­sors and what con­sti­tutes a fair income for dis­trib­u­tors,” he added.

According to Sicolo, an urgent pri­or­ity is to inves­ti­gate how dis­counted sup­plies reach super­mar­ket shelves.

Some prac­tices should be aban­doned, he said, includ­ing ​“tech­niques such as online auc­tions dis­guised as ten­ders to select sup­pli­ers based on increas­ingly aggres­sive prices.”

Supplier ten­ders by large retail­ers often pri­or­i­tize price over qual­ity, using com­pet­i­tive bid­ding mech­a­nisms that push mar­gins to unsus­tain­able lev­els.

While pre­sented as effi­ciency tools, such prac­tices are under inves­ti­ga­tion because they may dis­tort mar­kets, weaken pro­duc­ers’ bar­gain­ing power, com­press agri­cul­tural incomes and ulti­mately under­mine trans­parency, long-term sup­ply sta­bil­ity and prod­uct value for con­sumers.

“These prac­tices do not allow a focus on prod­uct qual­ity or the par­tic­i­pa­tion of small and medium-sized com­pa­nies, which are the back­bone of national agri­cul­tural pro­duc­tion. Nor do they sup­port the devel­op­ment of new agri-food projects,” Sicolo said.

Ahead of the report, Olive Oil Times con­tacted major Italian food retail­ers. Esselunga, one of the country’s largest chains, responded through Federdistribuzione, the sector’s main trade asso­ci­a­tion.

Federdistribuzione President Carlo Alberto Buttarelli said that ​“with regard to rela­tions with the agri­cul­tural pro­duc­tion sec­tor, we have always been com­mit­ted to guar­an­tee­ing fair remu­ner­a­tion for farm­ers. Our com­pa­nies are deeply rooted in local ter­ri­to­ries.”

Buttarelli also noted that pri­vate labels are ​“an impor­tant asset for con­tain­ing prices and ensur­ing access to qual­ity prod­ucts for the largest pos­si­ble num­ber of peo­ple.”

He added that infla­tion had largely been absorbed by retail­ers, cit­ing research from inde­pen­dent pub­lic bod­ies cov­er­ing the 2023 – 2024 period, which he said demon­strated restraint by large food retail­ers.

Alessandro Mostaccio, pres­i­dent of con­sumer asso­ci­a­tion Movimento Consumatori, said the AGCM inves­ti­ga­tion ​“rep­re­sents a major oppor­tu­nity for the entire Italian agri-food sup­ply chain.”

In a state­ment, Mostaccio stressed that the oppor­tu­nity should be seized, par­tic­u­larly by weaker actors such as farms and proces­sors, which are often squeezed by ris­ing pro­duc­tion costs and con­trac­tual imbal­ances favor­ing buy­ers.

He encour­aged stake­hold­ers to sub­mit anony­mous reports to the author­ity if they had expe­ri­enced com­mer­cial abuses or unfair trade-spend­ing require­ments linked to shelf place­ment or pro­mo­tional ser­vices.

The con­sumer asso­ci­a­tion ADOC also praised the AGCM ini­tia­tive.

ADOC noted that while large food retail­ers account for 84 per­cent of total food sales in Italy, this dom­i­nance ​“should not be inter­preted as an absolute man­date.” The trust con­sumers place in large-scale retail, it said, is sig­nif­i­cant but ​“not a blank check.”