Antitrust law in the pasta sector

10 August 2011

Licia Garotti, Linda Brugioni

Struggling for the price of pasta: the illicit agreement between pasta operators

A smoking dish of pasta is not just a symbol of the Italian cuisine.

Pasta means a lot for the Italian market, beside for Italian gourmets.

In fact, Italy is one of the leading producer of pasta worldwide as well as the main consumer of pasta (i.e. 26 kg per year for each individual – Source: UNIPI).

As a consequence the Italian market of pasta involves high interests and high revenues. Such data easily explain the outcome of the recent decision [1] issued by the Consiglio di Stato (the Administrative High Court) which ascertained the existence of two agreements among the operators in the pasta sector infringing Article 81 TEC (now Article 101 TFEU) limiting competition and aimed at coordinating the price of pasta in Italy.

The factual background of the case dates back to October 10, 2007, when Federconsumatori Puglia (i.e. a consumer association based in Puglia) filed a complaint before the Italian Competition Authority (“Autorità Garante della Concorrenza e del Mercato – AGCM”) about an alleged agreement between the Puglia manufacturers of pasta in order to increase the price of pasta of 25%.

Further to such complaint, the AGCM started an investigation procedure in compliance with Article 81 TCE against the Association of Italian Manufacturers of Pasta (“Unione Industriali Pastai Italiani – UNIPI”) and the National Association of the Small and Medium Food Industry (“Unione Nazionale della Piccola e Media Industria Alimentare – UnionAlimentari”) in order to ascertain whether such agreement existed.

During the investigation, the search was extended to 29 Italian pasta manufacturers, most of them leading industries in the sector; such companies indicated to be available to take some repairing measures.

However, the AGCM considered such measures non sufficient and, having ascertained the existence of an agreement between undertakings limiting competition by reducing unanimously the price of pasta, issued fines up to 5 million Euros to the parties involved.

Such decision was appealed by the parties involved before the Regional Administrative Court of Lazio (“Tar Lazio”) basing their defense on the fact that such price increase was due to the higher price of grain.

However, the Administrative Court confirmed the findings of the AGCM in two decisions, indicating that two agreements occurred in order to increase the pasta price.

The first agreement took place between UNIPI and the Italian pasta companies; UNIPI had a crucial role in such agreement by communicating the established increase through different means to the operators of the field.

The second agreements occurred by means of a resolution issued by UnionAlimentari aimed at directing all the pasta operators towards a uniform price increase. With such conduct UnionAlimentari provided its members with a clear signal to increase unanimously the prices, which substituted the spontaneous and independent reaction of increasing the price of pasta as a consequence of the increase of the grain price.

The unlawfulness of the two agreements was considered to be particularly serious due to the consequential increase of the purchase price at a supplier level and the final price paid by the end consumer.

Again the pasta manufacturers and the other associations involved in the proceeding appealed the decisions of Tar Lazio before the Administrative High Court.
Also the Administrative High Court confirmed the decisions of the first instance Regional Administrative Court.

In particular, the High Court indicated that “although the increase of prices further an increase of the price of raw materials is an ordinary rule of conduct of companies, in a free competition market is not licit that such price increase is due to a concerted decision of competitors, instead of an independent choice, which could be different than a price increase”.


[1] Decision of the Administrative High Court no. 896/2011 of February 9, 2011.