On 24th October 2012 new provisions regulating wholesale food and produce contracts (“Contratti agroalimentari “) in Italy, lost in a wide ranging raft of new legislation (issued in January and aiming to revive the economy), have come into force. The effects for anyone buying food wholesale from Italian suppliers are extensive and unless great care is taken, potentially devastating.

All wholesale contracts for the supply food in Italy must now be in writing, and must expressly indicate their term (“Durata “), the quality and characteristics (“Qualita` e caratteristiche ”) of the relevant produce / foodstuff, the sale price (“Prezzo “), delivery and payment terms. In case of default any such sale contract will be null and void under Italian law and fines ranging between Euro 516.00 and Euro 20,000.00 will become applicable.

The same legislation introduces general rules aiming to prevent general economic exploitation and unfair contract terms, which will also apply to protect farmers and Italian small producers. Unfair terms or conditions which exploit the weaker bargaining position of one party are forbidden, and penalties ranging between Euro 516.00 and Euro 3,000.00 are introduced.

Special rules apply to the payment terms of Italian foodstuff.

Perishable foodstuff (“Merci deteriorabili ”) must be paid within 30 days, any other Italian foodstuff must be paid within 60 days from the end of the month when the relevant invoice was received / the goods were delivered. In case of default interest at higher rates than normally applicable become immediately payable and cannot be waived.

The same legislation provides a detailed definition of “perishable goods / food” these are mainly farm produce, such fish and other Italian food with a sell by date not exceeding 60 days or the same produce when sold in bulk.

Meat, fish and milk are almost always “perishable”.

To ensure compliance, this new legislation provides that any buyer in default may also be penalised with fines ranging between Euro 500 and Euro 500,000 depending on the turnover of the defaulting party, the number of its breaches and the extent of the delays in effecting payment. The proceeds of these fines will be used to finance improved flow of information to consumers on food and similar products.

As if these provisions were not sufficient to guarantee enforcement, this new legislation expressly states that class actions may be brought by consumers or producers associations to ensure compliance.

Where supply contracts were being performed at the time this new legislation came into force, it will be possible to “regularise” them by the 31.12.2012. Of course, these new provisions do not apply to consumers.

All in all, Italian food has now got “legally hotter” for wholesalers and traders.

Avv. Claudio Del Giudice – Copyrights reserved – 13.11.2012