The channel law served two years of sanctions. This is legislation, still little known, which sought to end the differences between farmers, breeders, food companies and distributors. The basis: commercial practices and prices paid to the different links in the production chain, where the first are generally the losers. This law opened the door to a battery of public sanctions, to publicize those who break the rules.
During these two years, the Food Information and Control Agency (AICA), which depends on the Ministry of Agriculture, Fisheries and Food, made public nearly 300 sanctions, for a total amount of nearly 1.35 million euros. Figures which, for farmers and breeders, are not high enough to make the fines dissuasive and effectively eliminate any type of irregular practice.
The objective of this law is to make known which operators have acted in violation of the regulations, even if the fines are not yet considered high enough. For example, among the companies sanctioned are some large supermarket companies. Chains like Dia, Carrefour, Alcampo, Caprabo, Coviran or Froiz appear. The first of them, Dia, received one of the heaviest sentences of the last two years: 100,000 euros for “act of resistance, obstruction, excuse or refusal of the action of the ‘administration’.
The AICA publishes the sanctions and the companies, as well as the causes, but it does not go into the specific reasons or disclose any type of detail that would make it possible to know who was harmed, when and how. Furthermore, it only publishes them when they are final, whether by administrative or judicial means. In the following chart you can see which companies have ignored the on-chain law since January 1, 2023.
Carrefour, for example, was fined 3,001 euros for failing to meet payment deadlines – 30 days for fresh produce and 60 days for other products. The same thing happened with Caprabo, Froiz, Coviran (in this case, with 1,800 euros) and twice with Alcampo, also with 3,001 euros. Furthermore, the subsidiary of the French group Auchan was fined 39,600 euros for the same thing as Dia, for an act of resistance, obstruction, excuse or refusal of the administration’s action. The latest to join is the Makro wholesale chain, which, during this last quarter of 2024, was fined 1,800.6 euros for non-compliance with payment deadlines.
In addition, among the companies that violated the law there are also large food groups, such as the wine and juice producer J. García Carrión. In your case, a penalty of just over 9,000 euros for non-compliance with payment deadlines; and another of 3,601 euros for non-written formalization of food contracts. The Murcian group El Pozo Alimentación was fined 3,001 euros for not having included the price collected in the food contract; and the Swiss giant Nestlé, with 10,323 euros for non-payment on time.
The law provides that the minimum sanction – for minor problems – starts at 250 euros and can reach one million euros when it comes to very serious problems, for example when incorrect practice persists.
Only two fines for “selling at a loss”
One of the findings 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 “destruction of value in the chain”. To avoid this, he explains, “each operator must pay to the immediately preceding operator a price equal to or greater than the cost of production”.
Furthermore, it establishes that “to protect the marketing capacity of primary producers, operators who carry out the final sale of food or food products to consumers cannot apply or offer a retail price lower than the actual purchase price of these.” Only foods close to their expiry date are spared from this situation and provided that this circumstance is clearly indicated to buyers.
During these two years, two companies ignored these premises. One of them, during this last quarter of the year and for the highest sum decided so far: 132,000 euros to Fertofrans, which markets fruit and vegetables. The other sanction for the same reason was against the Dealtz chain, with 39,600 euros. This brand, as such, no longer exists in Spain. It was part of the Steinhoff group and focused on the sale of food and pharmaceutical products priced at 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 nearly 300 sanctions decided by the AICA over the last two years, half concerned non-payment of suppliers on time and almost 50 for not incorporating the agreed price into contracts or changing it unilaterally. .
The low number of sanctions for violating the chain law, their amount and the lack of effectiveness in putting an end to bad practices in the sector are partly at the origin of the rural protests at the beginning of the year. Indeed, the President of the Government promised to strengthen the law to make it more effective. A change that remains to be made. For the law to work and irregular behavior to be exposed, it is essential that farmers and ranchers report it. One solution is to do it through agricultural associations and organizations, in order to guarantee anonymity. In addition, the Ministry of Agriculture, to contain complaints from the primary sector, promised to transform the AICA into a state agency, to give it more resources. According to Minister Luis Plantas, it will have “a larger structure, with more human and material resources to carry out its functions” and “will considerably strengthen its inspection capacity”.
