In the back of a large agricultural warehouse, amidst loaded pallets, moving forklifts and empty crates stacked against the walls, Carmine* receives us in a small, bare-walled office lit by a cold neon light. Carmine is the chief operating officer of a company that produces and markets fruit and vegetables. As we talk, he opens a drawer and pulls out a thick folder full of papers and contracts.

“In here we have the framework agreement that we signed with a large retail chain,” he says, flipping through the pages from memory, like one who knows every comma of every clause. He stops at a line highlighted in yellow. “See, 10 per cent invoice discount. It’s there in black and white.”

He says this with a tone that wavers between resignation and matter-of-factness. The figure, he explains, is the “ristorno”, or rebate: a portion of the turnover that agricultural suppliers have to return to the large-scale retail trade (Grande Distribuzione Organizzata, GDO) at the end of the year. Officially, the rebate is justified as a contribution for flyers, advertising, logistical support, or the opening of new stores. But for people in the industry the meaning is far more straightforward: “that 10 per cent is the tribute you pay to work with them. To get access to their shelves. If you don’t accept it, you’re out.”

This practice is not the exception, but rather the firmly established rule, which everyone knows about but never openly denounces. “On average it’s 10 per cent, but there are chains that demand 12, 13, even 14 per cent. It depends on your bargaining power.”

The ristorno is the hidden margin deducted by the large-scale retail trade at the end of the season. And it’s only the tip of the iceberg. What Carmine shows us is the hidden face of the relationship between large retail chains and those who work the land: an opaque system consisting of forced discounts, unilaterally determined scrap rates, digital bargaining systems to get the lowest price, impossible delivery schedules, and relentless inspections that can invalidate entire shipments for the most trivial reasons.

The result is that farms are now on their last legs. Margins are shrinking, costs are rising, and in many areas – even those that have always been highly suited to agriculture – farms are starting to close down. This investigation is the result of months of work that included dozens of interviews conducted throughout the Po Valley, in particular the large fruit and vegetable district of Emilia-Romagna and Veneto, where there are producers and cooperatives that also buy produce from other parts of Italy, and sign contracts with retail chains.

Today, in these once fruitful lands, the climate has changed. Not just because of the increasingly extreme weather, but also because the numbers have stopped adding up. Many younger people have given up on taking over the family business. Others resist, but they often find themselves at a crossroads. “Sometimes you ask yourself if it wouldn’t be better to just leave the fruit on the tree rather than harvest it at a loss”, confides a producer with 40 years of farming behind him. 

Everyone talks in whispers. Everyone requests anonymity. Obtaining interviews, in this environment, means first and foremost listening and reassuring. Confidentiality is a necessary condition. It’s not just fear: it’s a question of survival. In a system where a simple email can be enough to lose a contract, raising your voice can put you out of business.

Structural windfall

Behind the orderly crates of peaches and courgettes, behind the neat and tidy supermarket shelves, there hides a reality of uneven bargaining, forced compromise and slashed margins, where those who work the land are often the lowest link in a chain that only moves wealth upwards.

Not even the consumer benefits from this tight and often cut-throat bargaining. The so-called ristorno gives them no advantage. The price at which the product is sold comes from a given price list, and is not the producer’s discounted price. The citizen, in short, pays as if there were no discount. And so the circle is closed. The producer, already beaten down by rising costs and suffocating demands, accepts the discount to avoid being locked out of the system. The consumer, ignorant of these dynamics, continues to pay the full price. And at the top, large-scale retailers earn a net profit, which many in the sector do not hesitate to define as a “structural windfall” – a systematic gain created from a power imbalance.

“It’s a system that only moves value upwards”, says Carmine, closing the folder. “The agricultural side of things has become an accounting anomaly, an underpaid supplier who is always under pressure. But as long as the fruit arrives and looks good on the shelves, no one asks any questions.” 

Millions changing pockets

Carmine’s company draws a six-figure turnover with large-scale retail trade. Applying the 10 per cent rebate to this sum, as well as the turnover of thousands of other suppliers, a mountain of money passes every year from the pockets of the producers to those of the retail chains. 

This is not some marginal deviation or aggressive commercial strategy practiced by only the most unscrupulous chains. The “entry tax” for a seat with the major distributors is the general rule, grudgingly accepted by all the producers interviewed. Every contract we had a chance to view included it, from low-cost chains like Eurospin and MD, to more traditional chains like Conad and Carrefour.

“The rebate is not up for discussion”, confirm all the operators. “At most you might manage to negotiate one or two percentage points, but all the brands use it,” says Carmine. “We always have to take into account this 10 per cent deducted at the end of the year. And the numbers don’t always add up.”

A law with no teeth 

Carmine’s claims are backed up by a recent report by Italy’s Institute of Services for the Agricultural and Food Market (ISMEA), the public body that monitors the prices of agricultural products. According to the report, out of every 100 euro spent by the consumer, only 7 end up in the hands of the farmer as net profit. “Logistics and distributors now take the largest cut of the final value”, the ISMEA report states. “The agricultural stage, on the other hand, continues to be penalised.”   

Precisely in order to rebalance this distortion in the market, in 2019 the European Union approved a directive against unfair commercial practices in the agri-food sector. The directive introduced two lists: a black list, which bans certain practices outright, and a grey list, which allows specific practices only when formalised in writing. Among the practices that are banned outright are last-minute cancellations of orders of perishable goods, and the unilateral modification of contracts. However, many of the most common demands of the large-scale retail trade are greylisted, and these are now legal when formally recognised. And thus the mechanism continues to function as before.   

In 2021, Italy implemented the European directive with law 198, and took it even further: the law bans electronic reverse auctions and below-cost sales, and entrusts the supervision of compliance to the Central Inspectorate of Quality Protection and Fraud Repression (ICQRF), a body of the Ministry of Agriculture, which can also receive anonymous complaints. Progress, in theory, but an illusion in practice.

“The devil is in the details,” declares the director of another fruit and vegetable company. “These practices that increase our hardship, such as the ristorno or compulsory promotions, are on the grey list. So for now we are not only forced to accept them, but we also have to sign contracts that enshrine their legitimacy. It’s even worse than that: we are self-certifying the reduction of our profits.”

The disproportionate relationship between the damage incurred by agriculture and the efficacy of the regulatory response can also be seen in the numbers. Lawyer Gualtiero Roveda, an expert in agri-food law, puts it in severe terms: “the European directive and law 198 that implements it are a band-aid for the mortally wounded.” You only have to look at the numbers: according to ICQRF data, between 2023 and 2024 the penalties imposed for unfair practices amounted to a total of just 665,000 euros. “A laughable figure”, says the lawyer, “when compared to losses estimated at more than 350 million euros per year for the entire Italian agricultural and food supply chain.”

Speaking of the mortally wounded, agricultural businesses are gasping for breath. Sometimes they change crops, and sometimes they simply shut down. “Every year hundreds of farmers decide to give up because they’re in the red,” explains Roveda. According to an investigation conducted among farmers by Agri 2000 Net, an agricultural services company, 30,000 farms are at risk of closure in Emilia-Romagna alone. The majority of those surveyed said that poor profitability was the reason they would consider shutting down.

“To break this vicious circle, there needs to be intervention in the asymmetrical relationship between agriculture and retail distribution,”continues Roveda. “Those who produce are in a position of weakness. They are fragmented, and often have little voice in the capital. The retail chains are in a position to impose one-sided conditions. And now they can do it with perfectly legal practices.”

Retail chains are in a position to impose one-sided conditions. And now they can do it with perfectly legal practices.

A silent bloodbath

In the silence of his office, amidst files and folders full of documents, Mirko – director of a large fruit and vegetable company – greets us with a dry gesture and shows us a chart. It is a simple but ruthless diagram illustrating the development of peach and nectarine production between 2006 and 2024.

“Look here”, he says, pointing to the figures. “In Emilia-Romagna we’ve lost 70 per cent of the cultivated land and 69 per cent of the quantity produced. In Veneto it’s even worse: minus 73 per cent of the cultivated land, and minus 69 per cent of the quantity produced.” He rests his head against the back of his chair, as if to catch his breath. “There was a silent bloodbath. And there was just one reason: we couldn’t get adequate prices. In the end, many ended up ditching the farm because they couldn’t make a living.”

Mirko takes a blank sheet of paper and draws a kind of freehand profit and loss table. “Let’s say that in the supermarket a peach is sold for two euros per kilo. At that point I have to set a selling price of one euro per kilo. But that euro is the gross price, from which I have to subtract everything: transport, processing, packaging. And also the compulsory 10 per cent ristorno for the GDO.” Then he stops and lowers his gaze. “At the end of the chain, if all goes well, the farmer is left with 30 cents. From two euros.” Finally, he adds, almost to himself: “and with those 30 cents we have to run a farm.”

Global market, local losses

When we buy a peach, a head of lettuce, or a bunch of grapes at the supermarket, we rarely ask ourselves where it comes from, who grew it, picked it, sorted it, and with what margins. The agri-food supply chain is long and fragmented, with several invisible but crucial steps. The product starts in the field and arrives, in most cases, at a cooperative or producers’ organisation. There it is packaged, selected for size and quality, and finally offered to large retailers. It is the cooperative or producers’ organisation that sits at the negotiating table with the GDO.

“Price negotiation takes place online, and sometimes it is settled by phone,” says Guido, director of a large cooperative in the Emilia-Romagna region. “There are several levels: first there are negotiations with the national retail chains, then the regional buyers may want to reopen negotiations. It is a process of continual renegotiation.” The price lists are normally weekly, but they can also change three times in a single week, depending on the season and product line. “The price is determined by the market,” he adds. “But in this market, those who sell are almost always in a position of weakness. Especially when it’s fresh products that perish quickly. Those who have the power to stock or reject these goods also have the power to dictate conditions.”

The “market”, moreover, has to be understood in the global sense, because Italian supermarkets don’t only buy from Italian producers. “Sometimes they can call us to say that the Spanish product costs less. Or the Greeks are offering a consignment at a lower price. The message is clear: either you accept these conditions, or you’re off the shelf.” It’s a subtle but continual form of pressure, which fundamentally undermines the principle of reciprocity that should regulate commercial relations.

Dumping on the European scale

In some cases, the game is even more sophisticated. A legal but economically and socially devastating international dumping mechanism is created. “An Italian brand might call a Spanish supplier for a promotion on peaches,” Mirko explains. “The Spaniard gladly accepts, because an increase in demand in Italy allows him to raise prices on the German or French markets. The price in Italy, on the other hand, goes down.” The result? The Italian producer, who in theory should be favoured in the domestic market, finds himself out of the game. Or he is forced to agree to prices that don’t even cover production costs.

“It’s all perfectly legal, even if deeply immoral”, he adds, showing a photo of a Eurospin fruit stand where Spanish peaches are being sold for 1.69 euros per kilo, exactly half the price of Italian peaches in the same supermarket. “The supply chain has become a European battlefield, but without any common rules. There are no limitations to cross-border procurement, nor instruments that offer genuine protection to producers.”

Thus, beneath the reassuring surface of shiny fruit displayed on supermarket stands, there hides a silent war made up of pressures, implicit extortion, and unequal negotiation. And those who grow the food we eat are often the weakest link in a chain that keeps getting longer, more complex, and more opaque.

Those who grow the food we eat are often the weakest link in a chain that keeps getting longer, more complex, and more opaque.

An overcrowded supply chain

“The disparity is in the numbers. For the 7000 people selling fruit and vegetables to the GDO, we have 25 retail chains. As a sector, we have our responsibilities too”, concludes Mirko. “If we were able to join up, to really come together, we would clearly have more contractual strength.”

But hyper-fragmentation also exists upstream. The retail chains also suffer from it, though in a different way. “There are too many points of sale,” says Mario Gasbarrino, the managing director of the Decò group, with years of experience with the upper echelons of large-scale retail trade. “In my view, at least 3000 supermarkets ought to close.”

Gasbarrino is not looking for shortcuts. He recognises the distortions in the supply chain, the questionable mechanisms, the continual pressures. The ristorno, he explains, “has always existed” in purchasing dynamics. Paradoxically, however, the practice has been dwindling for all products except fruit and vegetables, where it continues to grow. Gasbarrino also admits that the negotiations are often “muscular”. But the point, he says, is even larger. “We are in a deep crisis. Sales are falling, wages are stagnant. In this context, it’s a continual war, all against all. And when the horse won’t drink, there is nothing that can be done. It’s kill or be killed.” 

A brutal snapshot, but one that does not apply to everyone equally. Some large-scale retail chains are floundering: the French multinational Carrefour, after years in the red, is considering pulling out of Italy. Auchan, also a French company, left in 2019. Overall, however, the sector is holding strong, and even growing. This is confirmed by an analysis conducted by Area Studi Mediobanca: between 2019 and 2023, the largest retail chains recorded billions in profits. Eurospin leads the ranks with 1.56 billion euros, followed by VéGé (1.33 billion) and Selex (1.28 billion).

At this point, an unavoidable question arises: how much of these profits are derived from what Gasbarrino calls “muscular negotiations” with suppliers? How much extra margin has been snatched from an agricultural supply chain that is in increasingly dire condition, especially when it comes to perishable goods? On this point, Gasbarrino is clear. “Fresh fruit and vegetables are the most critical sector, and yet it’s all topsy-turvy. You plan promotions two months in advance, when you don’t even know if the products will be there. It’s absurd. Fresh products, by their very nature, should not be part of such promotional logic.” 

Promotions: a lose-lose game

“The promotions are a real disgrace”, confirms Walter from the other side of the barricade. Walter is a farmer in the Emilia-Romagna region with 30 years of experience and owner of a major fruit and vegetable company in the region. Sales, he explains, have become one of the most insidious traps in the supply chain. “They are no longer intended to get rid of excess produce, as they used to be. Now they are run by the supermarkets according to a logic of pure marketing, rather than agricultural considerations. They are only used to attract clients to the point of sale. And it’s us who pay the price.”

The concept of promotion has been turned on its head: from an instrument that supports the producer in times of surplus, it has become a commercial mechanism that serves the interests of the retailers. “If the retail chain decides that the apricots should go on sale for 1.29 euros per kilo, then you just have to accept it. And often you will have to sell below cost. No one asks about your margin. They only ask if you can deliver. And the response has to be yes.”

In the large warehouse of his farm, where the summer fruit season has just started, Walter moves between machines and automated production lines. The fruits are calibrated one by one, passing on rollers that measure their diameter to the last millimetre. “Each retail chain has its own specifications: there are those that only want peaches from 65 to 72 millimetres. 64 or 73 are no good. The market doesn’t want them. Even if they are perfect, even if they taste the same.”

After calibration, the fruits are sorted manually. Female workers watch the fruit pass one by one: one small blemish, one crack, and the fruit is rejected. “It’s called commercial waste, but in many cases it’s still good fruit. And it’s up to us to find a place for it elsewhere, perhaps in industry, at ridiculously low prices. Or just throw it away.”

But the real paradox, says Walter, comes later, at the packaging stage. “We can’t even choose who we work with. They impose their own choice of firms that we have to buy our trays, labels, and cartons from, even if they cost more than the market price, even if we pay them more than we’d pay if we arranged it all ourselves. It’s all imposed on us. And we know that a cut of these costs end up in the coffers of the retail chain, as a kind of guaranteed percentage.”

It’s a subtle but pervasive form of control. “We’ve become packers for third parties. They provide the specifications, choose the materials, dictate the schedule. Our autonomy stops at the orchard.”

And yet, Walter points out, all of this happens in total silence. “The consumer doesn’t know. All they see is a nice price. They don’t imagine that behind the 1.29-euro tray there are hours of work, kilos of discarded fruit, imposed materials, hidden mark-ups, and an agriculture sector that is increasingly struggling to survive.”

And so the producers continue to suffer in silence, hoping that circumstances in the market might swing to their favour. “If by chance there’s a shortage of produce, prices go up. At that point we too can adapt: we sink the knife into the butter. But we only get to handle this knife one week a year, if we’re lucky,” says Walter.

The non-compliance trick

Different area, same script. We are in the Bologna province, amid greenhouses and industrial warehouses converted for agricultural logistics. Corrado has been growing vegetables for three generations. His warehouse is abuzz: he is preparing pallets of lettuce to be loaded onto a truck bound for a large retailer. “90 per cent of my turnover depends on large-scale retail trade,” he says in a neutral tone, as if it were a simple fact and not some kind of complaint.

For Corrado too, the main problem is the asymmetry in the balance of power. “When we sign an agreement, for us it is law. For them, it’s a reversible option.” Corrado recounts a recent episode involving a contract that was closed through his cooperative with a large national retailer for 10 pallets of aubergines, with an agreed price of 60 cents per kilo. Nothing out of the ordinary. Until the buyer found another supplier willing to sell for 50 cents. “At that point he decided he no longer needed my product.”

And the contract? “He sent back seven pallets, on the grounds of non-compliance. It was just a pretext. The produce was perfect, we all knew it. But they can afford to behave like that. And we cannot.”

This behaviour is in fact one of the commercial practices blacklisted by law 198, which implements the European directive on unfair practices. In theory, Corrado was entitled to report everything to the ICQRF. But he didn’t do so. He didn’t even give it much thought.

“Do you remember Peron?” he asks, crossing his arms. Fortunato Peron, a well-known pear seller from the Cesena province, a few years ago reported the supermarket chain Coop Italia to the Antitrust Authority for breach of contract. He won. But after that, no one ever called him. “He went out of business. Cancelled. Our sector has a long memory and thin skin. If you go against the retailers, you’re finished.”

The paradox of the agri-food supply chain is this: those who grow the food, those who harvest it by hand, are the ones who earn the least. At the bottom of the chain, agricultural producers have become the weak link, crushed between rising costs and prices imposed from above. And so the system fuels a war between the lower ranks: the large cooperatives and producers’ organisations, under pressure from retailers, end up shifting the burden onto individual farmers, especially the smallest ones, who have no voice or bargaining power. Rebates, extra costs, lost earnings: it all flows downstream, where there’s no room to plan ahead. Then there’s the fact that accounts, in most cases, are settled at the end of the year, when it’s already too late.

If the producer falls, so does everything else.

The disaster accountant

We are in the middle of Romagna: the acrid smell of cut grass mingles with the sweeter smell of freshly picked peaches. Andrea is a young farmer, in his early thirties. After studying agriculture he chose to stay on the farm with his father. “I didn’t want to be a technician, I wanted to be a farmer. But today, more than a farmer, I’m a disaster accountant.”

He speaks calmly, with a firm voice, without a hint of self-pity. Like a man who realised long ago that the rules of the game are not his to design. “The problem is always this: the price. Every week the cooperative sends us the price list. And we accept it. There’s no alternative. What can we do, stop harvesting? The fruit ripens, and if it’s not picked it has to be tossed out. And tossing it out hurts even more.”

Of the large retailers, he knows only their reflection. “I’ve never seen a buyer. I don’t even know what they look like. We bring the products, they tell us if it’s alright. And then we wait for the transfer. And the rebate, which arrives later, is like a deferred tax. Sometimes they deduct the only margin we thought we had. It’s not a surprise any more, it’s a sentence foretold.”

When asked if he has ever thought of quitting, Andrea thinks for a moment. “I’ve never thought of giving up, but I have stopped fooling myself. My grandfather used to say that the land gives you everything you need. Today it only gives you survival. And without another income in the family, or a little luck, you go under.”

Then there’s a word that is often repeated among the producers: dignity. They hardly ever talk about profits, growth, or operating margins. They talk about staying afloat, about being able to work without being subjected to a fresh imposition every day. “All we ask is to be treated as a part of the supply chain, not as its servants”, says Andrea. “Because if the producer falls, so does everything else.”

*All the names of the agricultural producers interviewed have been changed at their request, and all identifying details have been omitted.

Stefano Liberti is a 2025 Bertha Challenge Fellow. This is the second article in a four-part investigation coordinated by Internazionale with the support of the Bertha Challenge fellowship. The Italian version of this article is published by Internazionale.

Translated by Ciarán Lawless | Voxeurop