On 11th March 2016, the Italian Competition Authority (the “ICA”) issued a public statement, seeking new legislative rules to govern the dairy sector.
In May 2015 the ICA started a public investigation into the Italian dairy sector as the sector was experiencing a serious economic crisis. The ICA required public authorities to recognise several producer organizations able to carry out an effective concentration and centralization of commercial services.
The ICA referred to guide-lines issued by the European Union, which authorized the process of reorganization of the dairy sector in the internal market, to increase the efficiency of each individual undertaking.
The ICA investigation intended to highlight from a competition law standpoint some specific problems in the functioning of the diary sector, problems which were able to influence the final prices of dairy products.
In particular, many dairy undertakings complained that there was little correlation between the prices charged to consumers for the finished product and those applied to farmers for raw milk.
However, the investigation showed no competition violations by any undertakings involved.
The ICA pointed out that the price uniformity of raw milk could be attributed primarily to the present commercial practices where raw milk prices (which are negotiated with the main purchaser in Italy) are publicly available, making those prices a benchmark for the sector.
In light of that, the ICA held that it is really important for viable competition of the dairy sector to better define the negotiation criteria. To such extent, the ICA also alleged that public authorities should encourage the creation of a bigger professional association, having the power to concentrate supplies and centralise services.