Agro-industry

Seedless grapes, distribution free from multinationals

Storical Supreme Court ruling on new fruit varieties: unrestricted commercialisation for producers once the royalty for using the patent has been paid

21 May 2024

Dominio delle big. In Italia la maggior parte della produzione di uve senza semi appartiene a poche multinazionali

3' min read

In the seedless grape sector - the top of varietal innovation in Italy - it will no longer be a few multinationals (technically the 'breeders') who will decide on distribution, but the producers who, once they have acquired the patent on the variety - through the payment of a royalty - will be freed from any link with the company that, in fact, invented the new plant species. The liberalisation was decided by the Court of Cassation in a revolutionary ruling for the sector a few days ago.

Seedless (or seedless) grapes are a fast growing sector, especially in the South (Apulia and Sicily), so much so that today among the top ten grape cultivars in Italy, seven are seedless. The strand represents the cutting edge of varietal innovation in our country and many operators are ready to bet that it will ensure the success of the sector in the national and European markets over the next thirty years.

In fact, in Italy, however, most of the production of so-called seedless (or seedless) grapes belongs to a few multinationals which, in addition to collecting a royalty for the use of the patent, have until now imposed on growers the distributors to whom they sell the product: a constraint felt by many operators as a noose around their necks, so much so that it has generated a multitude of disputes.

'The Supreme Court's ruling,' explains Massimiliano Del Core, president of the Italian Table Grape Commission, 'changes everything: now the intellectual right of the breeder, once covered through the payment of royalties, is limited to the act of authorising the planting of the variety and no longer follows the pending path of marketing: the Supreme Court has in fact defined this constraint as incompatible with the principles of public interest connected to safeguarding agricultural production.

In fact, however, the umbilical cord that has kept producers tied to large companies such as the Californian Sun World International LLC (the protagonist of the case examined by the Supreme Court), has guaranteed a series of protections in terms of commercial outlets, protection from competition and has contributed over the years to the consolidation of a virtuous supply chain and an efficient business model: in fact, the valorisation of the fruit takes place immediately after the harvest, when it is placed on the market with a commercial brand that promotes its valorisation.

The scenarios that open up, therefore, raise a number of questions about the consequences of this liberalisation and the validity of existing contracts (Cut estimates about fifty contracted traders and about 10,000 hectares of seedless cultivar production under patent).

"The parties will be able to continue to apply the clauses of the contract defined as invalid by ruling 9429/24 both in existing contracts and in contracts entered into in the future," clarifies lawyer Carolina Cordero di Vonzo, of Baker McKenzie. 'However, should one end up in front of a judge, he could declare the clause unenforceable,' she concludes. What risks widening, therefore, is the litigation front.

There is also fear on the investment front. "Which and how many breeders - asks di Vonzo - would be interested in investing in Italy without the certainty of a return? New variety development programmes involve the deployment of enormous resources over a long period of time and without varietal innovation we will not be able to meet the sustainable development goals aimed at by the entire EU," he adds.

The path suggested by Del Core to deal with feared ungovernability is that ofan innovation table that brings together all the players in the supply chain: 'If, at this time of confusion in the system, we are able to govern our supply chain, leaving in place the existing agreements that have proven to be correct and healthy for business purposes and guaranteeing producers who feel they do not want to enter, the freedom to do so, then the market will find its own adjustment. Otherwise, we will have lost everyone, producers and operators, but above all the chance to move forward with innovation,' he concludes.