Italian Competition Authority’s Investigation into Large-Scale Distribution in the Food Sector

By on November 9, 2010

by Veronica Pinotti, Philipp Werner and Martino Sforza

On 6 November 2010, the Italian Competition Authority launched an investigation into the role of large-scale retail distribution in Italy’s food sector.  The investigation aims at assessing potential antitrust issues in this sector, and will focus on the agreements and strategic negotiations between suppliers and large-scale distributors, the role of centralised purchasing, the use of private-label brands, and their likely effects on the final prices of food products.  This obviously also has an impact on large multinational food and beverage suppliers.

Companies involved will soon receive detailed questionnaires and requests for information, which need to be handled with care by antitrust attorneys in order to minimise the risk of a potential ad hoc investigation.  In the past, the Authority’s sectoral investigations have proven to be the prelude to specific investigations against individual companies predicated on the basis of the information gathered during the sectoral investigation.  It is therefore of utmost importance to have specialised assistance at this early stage of the investigation.  It is also crucial for companies to engage outside counsel to conduct an effective audit and create a tailored compliance programme in order to be prepared for potential dawn raids and prepare an effective defence.  In addition, the whole vertical relationship between suppliers and distributors may have to be reviewed in the light of the European Commission’s new vertical guidelines and experience from other Member States.

The food and beverage industry is under investigation in a number of jurisdictions, and a comprehensive strategy in dealing with these inquiries is therefore critical.  McDermott Will & Emery is particularly well-placed to assist companies in this connection, not only by reason of its extensive experience in the sector in Italy, but also by reason of its experience in dealing with similar investigations in other EU Member States.

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