October 10, 2008 / 12:12 PM / 9 years ago

Italy's "king of cheese" in crisis plea on prices

ROME (Reuters Life!) - Producers of "Parmigiano Reggiano," the prized Italian Parmesan cheese grated over pasta or eaten in chunks, are pleading with the government to declare a state of crisis due to falling prices and soaring costs.

The price of the so-called "King of Cheese" has slid for four years in a row while the cost of raw materials like milk and energy has shot up, leaving 30 percent of producers on the verge of bankruptcy, says farm industry group CIA.

Comparing their woes to those of national airline Alitalia -- which the government rescued by rewriting bankruptcy law -- Parmesan producers want Rome to intervene to raise prices.

"The wholesale price of Parmiggiano Reggiano has now fallen below the cost of producing it," said Giorgio Apostoli of farmers group Coldiretti. "This is a prized product, there ought to be policies to safeguard those who produce it."

With high-quality Italian foods always a serious national matter, both the government and the opposition agreed the matter was an emergency that required immediate action.

Citing a "dramatic moment" with the risk that "thousands would lose their jobs," Prime Minister Silvio Berlusconi's government set up a new round of talks to address the crisis.

But the producers want more than talks to thwart what they see as a small group of large supermarkets able to dictate low prices by buying the bulk of the Parmesan produced.

The large round blocks of cheese now command a wholesale price of only 7 euros to 7.5 euros per kilogram ($9.61-$10.29 per 2.2 lb), while adhering to the strict guidelines to make Parmesan mean a minimum of 8 to 8.5 euros per kilogram is needed just to cover costs, says CIA.

CIA said in a statement high production costs meant "many businesses that incurred high debts to restructure now risk bankruptcy because of lower revenues from a collapse in prices."

Coldiretti's Apostoli acknowledges the sector is suffering from excess output -- it produces 11 percent more than it did eight years ago -- while Italians are consuming less.

But he says the government ought to suspend antitrust law for a period so that producers can band together to cut output instead of letting the market weed out weaker players.

"We just need a bit of time to reorganize ourselves," he said, adding that Italy would be poorer if Parmigiano producers went out of business. "This is a historic product with ancient traditions and a very strict and disciplined guidelines on rearing cows for the cheese."

But for some, the crisis plea bore touches of irony.

When producers went to Rome this week to lobby government, one newspaper said "the king of cheese has gone to Canossa" -- a historical reference signifying humble submission to authority.

The town of Canossa, where English King Henry IV stood in the snow for three days to submit to Papal authority, is located in Emilia Romagna province, where Parmigiano is produced.

Editing by Paul Casciato

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below