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Fine confirmed on pasta makers

Leading producers found to have created price cartel

29 October, 17:48

Fine confirmed on pasta makers

Fine confirmed on pasta makers

(ANSA) - Rome, October 29 - The Lazio regional administrative court (TAR) on Thursday upheld fines totalling 12.5 million euros slapped on 26 pasta producers and the national producers' union Unipi for creating a cartel with the aim of stifling competition and driving up prices.

The fines were imposed last February by Italy's anti-trust authority which examined price trends from October 2006 through March 2008.

''Today is a great day for the anti-trust authority because we beat all the appeals lodged at the TAR,'' the chairman of the market watchdog, Antonio Catricala', said. The producers fined by the anti-trust authority accounted for some 90% of the domestic market.

Pasta prices soared by two-digit percentages in 2008 to the outrage of consumers and dismay of farmers, who have seen wheat prices at the farm fall while their production costs rocketed.

Also fined by the anti-trust authority 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 reply to protests by consumer groups and farmers' associations, Italy's leading pasta makers in February admitted that prices on the farm for wheat had declined, but justified their price hikes on the grounds that while prices had been stalled for years, on the commodities market wheat prices had soared due to speculation on biofuels.

They also said that their costs had been driven up by higher fuel prices, which affected production and transport, and increased labor costs.

Unipi reiterated this position even after the anti-trust authority's action and added that in the sector ''there has never been any speculation nor tacit accord to damage the interest of consumers''.

The cause for the hike in pasta prices, Unipi explained, ''is more linked to factors related to production costs than the cost of the raw material, durum wheat, even though in the first half of 2008 it was 220% higher than the average for all of 2005''.

Unipi said it was ''bitter and concerned'' over the decision by the anti-trust authority and would file an appeal against it in the proper seat.

CONSUME GROUPS AND FARMERS APPLAUD DECISION.

Consumer groups applauded the fines which they said sent ''an important signal on the need for transparency on our market. It was inadmissible that pasta prices continued to climb while the cost of raw materials declined,'' .

''It is only through free competition and combating speculation that we can guarantee real price controls for the consumer,'' the Unione Consumatorigroup added.

The anti-trust action was also welcomed by farmers who said that, while it was impossible for them to be reimbursed, consumers should now be compensated by a slash in retail pasta prices.

''This whole affair has made it perfectly clear that greater transparency in pricing is urgently needed. We believe that our proposal of double prices, displaying both producer and retail prices, is extremely valid and we think it would be opportune for the government to adopt this,'' the Confederation of Italian farmers said.

One of the repercussions of the surge in pasta prices was that Italians in 2008 for the first time began buying and eating less pasta and many turned away from the healthy, Mediterranean diet.

The 26 pasta makers fined were: Amato, Barilla, Colussi, De Cecco, Divella, Garofalo, Nestle', Rummo, Zara, Berruto, Delverde, Granoro, Riscossa, Tandoi, Cellino, Chirico, De Matteis, Di Martino, Fabianelli, Ferrara, Liguori, Mennucci, Russo, La Molisana, Tamma and Valdigrano.

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