The Chain Law has served two years of sanctions. This is legislation, not yet widely known, which sought to put an end to discrepancies between farmers, ranchers, food companies and distributors. The basis: the commercial practices and prices paid to the different links in the production chain, where the first ones usually lose out. This law opened the door to a battery of sanctions that are public, to make known who breaks the rules.
In these two years, the Food Information and Control Agency (AICA), which depends on the Ministry of Agriculture, Fisheries and Food, has made public almost 300 sanctions, which have totaled a combined amount of almost 1.35 million euros. Figures that, for farmers and ranchers, are not high enough to make the fines dissuasive and effectively eliminate any type of irregular practice.
What this law has achieved is to make known which operators have acted in breach of the regulation, although the fines are still not seen as high enough. For example, among the sanctioned companies are some of the large supermarket companies. Chains such as Dia, Carrefour, Alcampo, Caprabo, Coviran or Froiz appear. The first of them, Dia, has received one of the highest punishments in the last two years: 100,000 euros for “an act of resistance, obstruction, excuse or refusal of the administration’s actions.”
The AICA publishes the sanctions and the companies, as well as the cause, but does not go into the specific reasons or disclose any type of detail that would allow us to know who has been harmed, when or how. Furthermore, it only publishes them when they are final, whether through administrative or judicial means. In the following graph you can see which companies have skipped the Chain Law since January 1, 2023.
Carrefour, for example, was fined 3,001 euros for skipping payment deadlines – 30 days in the case of fresh food and 60 days for other products. The same has happened with Caprabo, Froiz, Coviran (in this case, with 1,800 euros) and on two occasions with Alcampo, also with 3,001 euros. In addition, the subsidiary of the French group Auchan was punished with 39,600 euros for the same thing as Dia, for an act of resistance, obstruction, excuse or refusal of the administration’s actions. The latest to join is the wholesale chain Makro, which in this last quarter of 2024 has been fined 1,800.6 euros for skipping payment deadlines.
In addition, among the companies that have violated the Law there are also large food groups, such as the winery and juice manufacturer J. García Carrión. In your case, a penalty of just over 9,000 euros for skipping payment deadlines; and another of 3,601 euros for not formalizing food contracts in writing. The Murcian group El Pozo Alimentación has been fined 3,001 euros for not incorporating the collected price into the food contract; and the Swiss giant Nestlé, with 10,323 euros for not paying on time.
The law states that the minimum penalty – for minor issues – starts at 250 euros and can reach one million euros when dealing with very serious issues, for example, when an incorrect practice persists.
Only two fines for ‘selling at a loss’
One of the conclusions of these first two years of sanctions with this law is the low number of violations due to a practice known as ‘selling at a loss’. In this case, the legislation speaks of “the destruction of value in the chain.” To avoid this, he explains, “each operator must pay the immediately preceding operator a price equal to or greater than the production cost.”
Furthermore, it establishes that “to protect the marketing capacity of primary producers, operators who make the final sale of food or food products to consumers may not apply or offer a retail price lower than the actual purchase price of the same.” . Only foods that are close to their expiration date are saved from this situation and as long as this circumstance is made clear to buyers.
In these two years there have been two companies that have ignored these premises. One of them, in this last quarter of the year and for the highest sum decided so far: 132,000 euros to Fertofrans, which markets fruits and vegetables. The other sanction for this same reason was against the Dealtz chain, with 39,600 euros. This brand, as such, no longer operates in Spain. It was part of the Steinhoff group and focused on selling food and drug products at a price of 1.50 euros. Its stores are now part of another chain of the same multinational, Pepco, focused on the sale of clothing and textiles.
Of the almost 300 sanctions decided by the AICA in the last two years, half have been for not paying suppliers on time and nearly fifty for not incorporating the agreed price into the contracts or modifying it unilaterally.
The low number of sanctions for breaking the Chain Law, their amount and the lack of effectiveness in stopping bad practices in the sector were, in part, behind the rural protests at the beginning of the year. In fact, the President of the Government promised to strengthen the law to make it more effective. A change that has yet to be made. For the law to work and irregular behavior to come to light, it is key that farmers and ranchers report it. One way is to do it through agricultural associations and organizations, to guarantee anonymity. Furthermore, the Ministry of Agriculture, to curb complaints from the primary sector, promised to convert the AICA into a state agency, to provide it with more resources. According to Minister Luis Plantas, it will have “a greater structure, with more human and material resources to perform its functions” and “significantly strengthen its inspection capacity.”
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