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

Fri Oct 10, 2008 8:10am EDT
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By Deepa Babington

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.   Continued...