Italian Competition Authority Opens Market Probe Into Grocery Retail Power & Food Prices

Key Takeaways

• Food Inflation Gap Drives Scrutiny: Food prices in Italy rose nearly eight percentage points more than overall inflation between October 2021 and October 2025, prompting closer examination of pricing dynamics in the agri-food sector.
• Retail Buyer Power In Focus: The investigation centers on how large-scale grocery chains exercise purchasing power over fragmented agricultural suppliers, including through buying groups and multi-level aggregation structures.
• Trade Spending Practices Under Review: Fees charged to suppliers for listings, shelf placement, promotions, and product launches will be assessed to determine whether they reflect genuine services or reinforce bargaining imbalances.
• Private Labels Seen As Strategic Leverage: The growing prominence of retailer-branded products is being examined for its impact on competition, supplier relationships, and final consumer prices.
• Public Consultation Open Until January 2026: Farmers, suppliers, retailers, and any other stakeholders have until 31 January 2026 to submit input, with the investigation set to conclude by the end of 2026.

Deep Dive

Italy’s competition watchdog has opened a broad market investigation into how large-scale grocery retailers shape pricing and value distribution across the agri-food supply chain, as food prices continue to rise faster than inflation and farmers report mounting pressure on margins.

The inquiry, launched by the Autorità Garante della Concorrenza e del Mercato, will examine the role played by major retail chains in determining supplier remuneration and final consumer prices. The Authority has also opened a public consultation, inviting feedback from stakeholders by 31 January 2026.

The investigation comes amid a sustained gap between overall inflation and food price inflation in Italy. Data from ISTAT show that between October 2021 and October 2025, food prices rose by 24.9 percent, compared with a 17.3 percent increase in the general consumer price index.

That divergence became especially pronounced in the years following the pandemic. While price growth has moderated more recently, the gap has not closed. In October 2025, overall inflation stood at 1.2 percent, while food prices were still rising at 2.3 percent year-on-year. Even unprocessed food products recorded inflation of 1.9 percent, remaining above the broader inflation trend.

Against this backdrop, agricultural producers have repeatedly pointed to squeezed or insufficiently growing margins. The Authority notes that this may reflect a deep structural imbalance between a highly fragmented base of suppliers and an increasingly concentrated retail sector.

Buer Power Under Scrutiny

At the center of the investigation is the commercial relationship between suppliers and final distributors, a stage AGCM describes as pivotal for both upstream profitability and downstream price formation.

The Authority will assess how large-scale retailers exercise their purchasing power, including through complex, non-corporate aggregation arrangements such as cooperatives, buying groups, and so-called super buying groups. These structures can result in multiple layers of negotiation with the same supplier, potentially amplifying buyer leverage.

AGCM will also look closely at the fees suppliers pay retailers for sales-related services, commonly referred to as trade spending, including charges for product listings, shelf placement, promotions, and new product launches. The inquiry will examine whether these payments correspond to services genuinely requested and delivered, or whether they function as an additional channel for extracting value from suppliers.

The Growing Role Of Private Labels

Private label products, known in Italy as products branded by the distributor, will be another major focus of the investigation. These products now occupy an expanding share of supermarket assortments and are increasingly central to retailers’ competitive strategies.

According to the Authority, private labels strengthen retailers’ bargaining position not only because of their scale, but also because they place retailers in a dual role, both as buyers from suppliers and as direct competitors to branded manufacturers. The private label segment recorded revenue growth of 2.4 percent in 2024 and more than 35 percent growth compared with 2019, underscoring its growing economic weight.

AGCM plans to examine how private label products are sourced, how suppliers are selected, how purchasing conditions are set, and how these products are ultimately priced and positioned for consumers.

Legal Basis And Investigation Timeline

The market investigation has been launched under Italy’s competition law framework, which allows the Authority to conduct sector-wide studies when price behavior or market dynamics suggest that competition may be restricted or distorted.

The inquiry will be led by Daniela Giangiulio, who has been appointed as the official responsible for the procedure. The Authority has set 31 December 2026 as the deadline for concluding the investigation.

As part of the process, AGCM has formally invited contributions from farmers, suppliers, retailers, trade associations, and other interested parties. Submissions may address issues such as:

• How purchasing power is exercised by large-scale retailers, particularly in product segments where imbalances appear most acute
• Competitive effects linked to multiple layers of purchasing aggregation
• Transparency and efficiency in trade spending arrangements
• Opportunities and challenges associated with supplying private label products
• How changes in input costs, including cost savings, are passed through to consumers

The decision launching the investigation will be published in AGCM’s official bulletin and on its website, marking the start of a detailed examination of competition dynamics in Italy’s food retail sector, an area with direct consequences for farmers, suppliers, and consumers alike.

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