Canettone and panettone, the necessary revolution

The panettone for dogs, ‘Canettone’, is launched this Christmas at a price 20 times higher than the traditional ‘human’ sweet. It is just a symptom of this poor Italy. The revolution is necessary, and goes far beyond.

One wonders how it is possible that an authentic Italian panettone can be sold at ~ 2.5 €/kg, while a Canettone is sold at ~ 47.2€/kg. Without any rhetoric, rather some reflection on the market and its players.

Canettone, a Christmas phenomenon in a flourishing market

The first answer the formidable price of the dog sweet could by itself silence any further debate, there is one Canettone, at least 31 Panettoni. And it is obvious – albeit reprehensible – the market law that leads to increasing the price of rarer objects, lowering that of more common goods.

The Canettone is an original but not new idea. The writer (Vito Gulli) was director  marketing of a group  leader in the  Pet Food, in the early 80s, where quite a lot of research and development was done. It also happened to bring home some dog pastries, place them in a nice patisserie tray, and offer them after lunch to the sweet lovers at home. The father and father-in-law greatly appreciated those soy lecithin-based chocolates, only to get angry when they found out they were designed for dogs, even though they were ‘food grade’.

At that time the Italian market was not yet ready for the ‘sweet-loving’ avant-gardes, which were already widespread in the Netherlands and England. Back then the total market ‘dog food’ was 80% supplied by ‘table scraps’, that is the leftovers of consumers' daily meals, who still could not afford to dedicate too many resources to their animals.

Today instead, as can be learned on the website of the Canettone producing company, the requests are so high that delivery cannot be guaranteed by Christmas. The market ‘Pet Food’ advances with the wind in its sails, without, among other things, the control authorities having yet started to protect consumers from frauds that sicken it.

Panettone, a Christmas phenomenon in a depressed market

The data that should really worry is not the Canettone in the stars but the panettone in the stables. The Christmas cake par excellence, with premium ingredients in legally defined quantities, is at rock-bottom prices even before the holidays.

The offer is wide and competition fierce, there are those who try to distinguish themselves with initiatives of dubious legitimacy such as 'lactose-free', to try to escape the bloody price battle. But in the end, victims are counted on the field, which would be much better to avoid.

The dictatorship of price inevitably forces abandoning traditions, lowering the quality of raw materials, and trivializing products with available technologies. Working conditions worsen – the Italpizza case, beyond any consideration, can also find a reading key in this – and factories sooner or later explode.

The machete of low cost as a weapon of combat is destined to decimate the food production fabric, which in Italy is supported by quality productions rooted in territories, difficult if not impossible to convert into economies of scale able to compete on large numbers with the giants of  Big Food.

The drug of price and its  pushers

In this fight to the massacre the big  business always wins. Or at least thinks it wins, in a short-sighted short-term vision that is useful to mark victories on economic accounts and production bonuses for high-ranking managers. However, the drug of price and the financial drift of industrial and distribution activities have noteworthy side effects.

Unfair commercial practices  Those of large-scale retail trade (GDO) – to date unpunished, despite the efforts of the author (Dario Dongo) in drafting Article 62 in its original text – and the excessive promotional intensity of operators with broader financial resources are suffocating food production in Italy, dotted with tens of thousands of businesses across the territory.

Thus is triggered a vicious circle of suffering that neither the public system nor the private one can mitigate. Bankruptcies and insolvency procedures, plant closures, layoffs of workers and employees, collapse of the related industries inevitably lead to widespread impoverishment of the masses. And even if the giants prevail, few will be able to buy their goods and services as domestic demand will be decimated.

The drug of price creates dependencies, and it is not easy to assign responsibility to its accomplices. The victims become part of the vortex and become  pushers in turn. Thus producers flounder in the spiral of low price and low quality, distribution participates with every tool useful to absorb its own pockets of inefficiency – without, however, managing to defend itself from the global giants ofecommerce.

The consumActors in turn struggle to assume awareness and responsibility for their role as an independent leverage of the market. They themselves, indeed we, can significantly influence the supply. The stance of Italian consumActors regarding palm oil has proven this power. Other examples are recorded on the animal welfare front, with the push for eggs from free-range hens. And with the democratization of
organic. But that is not enough.

Every man for himself

The integrity of the supply chain. It is necessary to restart from the local and fair dimension that produces value in the territory, demand ethics instead of exploitation, reward respect for the environment and biodiversity.

If producers are responsible  of the race to low cost – chasing the reduction of costs, then finally offshoring (first the costs, then the plants, and finally the tax headquarters) – the distributors, who triggered the spiral stimulus, perhaps even more so. Without realizing that they themselves, in fueling the price battle, arm the hand of their killer: unemployment in their territory, therefore the lack of purchasing power. Full shelves and cash registers without lines, actually supermarkets completely empty. And they, unlike producers, arethe only ones who will never be able to offshore their retail outlets.

The large-scale retail trade it perseveres in maintaining an excessively harsh and imposing attitude towards the production chain. Essentially aiming to lower prices more and more, without considering the cyclical increases – even significant – in raw material costs.
All this forces the majority of Italian companies, mainly SMEs and micro-enterprises, to face unsustainable commercial costs in the medium to long term. If distributors were not so short-sighted, they would look beyond short-term objectives, foregoing some additional margin to avoid losing everything in the years to come.

The system cannot hold. The suffocating hegemony of distributors – even if within the boundaries of competition still effectively permitted, pending the new directive on unfair commercial practices – cannot continue like this without the tragic scenario described taking place.

Let those who must save us

A glimmer of hope  was glimpsed in Italy last June. When Federdistribuzione, Conad, and other brands signed an Ethical Code for the purchase of agricultural and food products. In line with commitments previously made by Coop Italia. The madness of double-descending auctions was thus stopped in time, thanks to the widespread mobilization of NGOs and unions. But it is still too little.

Politics must do its part. In Europe, where the definition of the UTPs directive (Unfair Trading Practices) is expected soon – under the Romanian Presidency of the Council (first half of 2019) –Unfair Trading Practices), of which Hon. Paolo De Castro is the rapporteur in Strasbourg. And in Italy, where it is necessary to revive the provisions of article 62 of law 27/12 by assigning controls to the initiative of the Guardia di Finanza. Because it is the duty of politics to balance the time between the rightful progress of advancement and the necessary re-planning of work.

No one should say 'It's the market, beauty!'. Because the infamous 'invisible hand' has already shown its limits, actually the noose for many, too many, all. The gap of social inequality has widened like never before, to the point of undermining the very foundation of civil society, the access of populations to essential life resources. And that is why politics must intervene and respond, 'It's politics, beauty!.

Then there is the Antitrust. Which deals with primarily of competition, but has not yet found the complaint by Great Italian Food Trade, last April, about Amazon's extortionate commercial practices towards suppliers. This legitimizes the continuation of abuses and the flourishing of giga-business that grinds the workers and exports our wealth without leaving even one euro to our Treasury.

The revolution is necessary and urgent, it must start from everyone's conscience. #Égalité!

Vito Gulli and Dario Dongo

Notes

(1) The original text of article 62, in prohibiting every unfair commercial practice for which an illustrative and non-exhaustive list was provided, entrusted the GdF with the official power of initiative, investigation, and sanction. This would have allowed the effective banning of such practices. However, during the conversion phase of the decree law, the controls were entrusted exclusively to the Antitrust Authority, resulting in the non-application of the new rules, except for the payment terms only (also extended during the conversion phase of thedecree law) defined therein. For further details see the free ebook ‘Article 62, a revolution?’, available at  https://ilfattoalimentare.it/ebook-articolo62. See also  https://ilfattoalimentare.it/articolo-62-regolamenti-filiera.html