Italy's antitrust authority slapped the country's biggest pasta producers with one of the largest penalties in the sector's history. Twenty-six pasta makers and the national pasta producer's union UNIPI were fined 12.5 million euro for unfair practices that stifled competition and drove up pasta prices for consumers.
According to the antitrust authority, the union and the country's leading pasta producers-which account for about 90 percent of the national market-were found guilty of agreeing to fix the prices of pasta. Prices have soared by about 25 percent over the past year even while wheat prices began to fall in late 2008.
The double-digit price increases sparked the outrage of consumers, many of whom cut their pasta consumption in response to the staggering hikes. In its probe, the antitrust authority ruled that pasta makers unfairly engaged in price-fixing agreements. Also fined were the national food market association, Unionalimentari, and the national union of small and medium-sized food businesses, Unpmia, for issuing orders to their members to uniformly raise prices.
In response to the allegations, pasta makers justified their price hikes on the grounds that wheat prices had soared due to speculation on biofuels, and that production costs were driven up by higher fuel and energy prices and increased labor costs.
UNIPI says it will appeal the decision. Of the 26 pasta producers fined, Barilla was ordered to pay six million euro, De Cecco and Divella one million euro, and Garofalo was order to pay the lowest fine at 500,000 euro.
Consumer groups and farmers associations praised the ruling. ‘The action by the authority sends an important signal on the need for transparency on our market...It is only through free competition and combating speculation that we can guarantee real price controls for the consumer', said Unione Consumatori.
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