Italy’s competition watchdog criticised for controversial country of origin decision: ‘This is populism elevated above laws’

The AGCM said that the probe found ‘misleading information’ about the origin of the wheat used to produce durum wheat semolina pasta was being disseminated through the product labels and websites of companies and brands including Divella, De Cecco, Margherita Distribuzione/Auchan, Cav Giuseppe Cocco and Lidl Italia.

Accorging to the AGCM, the practice in question involved 'deceiving' consumers on the characteristics of pasta with the terms ‘Italiamo’ and ‘Combino’.

The companies stressed that the semolina was milled in Italy. However, the AGCM’s decision was based on the idea that consumers were deceived by the use of a crop grown outside the country. The origin of the wheat was included in the ads and labels in small caps or on side panels, but this was deemed insufficient. The authority concluded consumers were ‘mislead’ into thinking the origin of the raw material – durum wheat – was Italian.

Lidl was the only company to receive a fine because the other parties said they would take remedial action. “The commitments consist of modifications to the labels and the respective sites to guarantee the consumer complete information on the origin… of the wheat used in the production of the pasta. The new information will avoid possible confusion between the origin of the pasta and the origin of the wheat,”​ AGCM said in a statement.

In contrast, the competition authority said Lidl ‘did not present any commitments during the preliminary investigation procedure’.

“Due to the importance attributed by consumers to information on the origin of the raw material and the spread of the chain's stores, the Authority therefore imposed a penalty of €1m.”​

Italy's take on country of origin labelling: Populism, politics and pressure groups

The Italian government has been outspoken on what it sees as the need for country of origin labelling, requiring manufacturers to print the name and address where food and drink products are manufactured.

While concerns have been expressed that this approach undermines the single market, a number of European countries have introduced some form of country of origin regulations, including France and Spain.

Italy’s antitrust authority – the AGCM – is an independent body responsible for enforcing the Unfair Commercial Practices Directive, including misleading advertising towards food products.

According to Luca Bucchini, managing director of Hylobates Consulting, the AGCM ruling stands out because it is ‘silent’ on the matter of who made the initial compliant. “While normally rulings make reference to the complainant (sometimes naming the entity or at least the type of entity), in this case the AGCM's rulings are silent on the matter,”​ he noted.

This is important because the position adopted 'is very much aligned with that of organisations such as the farmers' union Coldiretti, and some political parties', that aim to promote products that are based only on ingredients from plants grown in Italy or animals raised in the country, Bucchini observed.

Moreover, he continued, the ruling itself ‘goes beyond’ current legal requirements for country of origin labels.

“What is remarkable about the AGCM's ruling is that it explicitly goes beyond what the law says. In fact, the AGCM does not dispute that not only Lidl but also De Cecco, Divella, and others, were compliant. But the AGCM asserts that, in this case, compliance is not sufficient to avoid misleading consumers.”​

‘Strikingly’, Bucchini noted, the AGCM did not use a legal analysis to support their reasoning but quoted a European Commission survey of consumers that found the majority of Italians are concerned about country of origin.

“The main argument is that Italian consumers want to know the origin of the durum wheat, and, if laws are not stringent enough, the AGCM will step in. Some would say this is populism elevated above laws."​

‘When laws are not sufficient, enforcement authorities would step in’

Bucchini believes this signals an increasing desire from the Italian authorities to diverge from European origin labelling rules.

EU Regulation No 775/2018 is ‘normally understood’ to refer to the origin of the ingredients, not to the place where it was grown, he noted. “The AGCM's decision signals that Italy may not comply with any EU regulation that does not explicitly require the place of harvesting of the durum wheat, or other prized ingredients, to be clearly declared. When laws are not sufficient, enforcement authorities would step in.”​

The AGCM also objected to the idea - also enshrined in Regulation No 775/2018 - that PDO and PGI products do not require additional specifications on labelling because the potential origin of the raw materials is strictly regulated. The AGCM suggested that even if PGI is allowed by law to use ingredients from plants not grown in Italy, consumers should still be alerted that it is not a ‘fully Italian’ product.

Bucchini believes that the decision could well face a legal challenge. “There are intense discussions in Italy over the consequence of this decision, which most experts believe to be legally unfounded. All eyes are on the Tar Lazio, which is the first appellate court for AGCM's rulings.”​

Lidl Italia and other companies named in the decision did not respond to request for comment.