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An Informa Economics IEG study shows GIs would take billions from the U.S. dairy industry, slash cheese consumption and increase prices for consumers.
Since 1939, Wisconsin cheese company Sartori has created high-quality products using fresh milk from nearby farms. But an effort by the European Union to take sole ownership of common cheese names like parmesan, asiago and feta threatens the future of the family-owned business, and others like it, according to a new economic analysis.
Surrendering to a European Union (EU) seizure of common food names would cost the U.S. dairy industry billions of dollars, slash domestic cheese consumption and increase prices for consumers, according to an analysis released Tuesday by Informa Economics IEG (a summary of the report can be found here).
The European farm and trade policy agenda is focused on using geographical indications (GIs) to unfairly grant European food producers a huge commercial advantage. It would force farmers and food producers outside of Europe to rebrand familiar foods with unfamiliar names. The resulting confusion in the U.S. domestic marketplace could shutter family farms, eliminate thousands of rural jobs and hurt the overall U.S. economy, the analysis said.
Names are vital to cheese
The issue is not about quality. At the Global Cheese Awards in England, Sartori’s Classic Parmesan won a gold medal. The issue is about global control of language.
“It’s critical that we maintain the ability to call that product parmesan for consumers,” says Blair Wilson, senior director of marketing at Sartori. Parmesan is the product, it fulfills standard of identity and eliminates confusion, he says.
The Global Cheese Awards also honored SarVecchio Parmesan as the Best USA Cheese and Best Non-European Cheese.
If the EU succeeds, Sartori would have to call its award-winning parmesan varieties something else, such as “hard grated cheese.”
The 60-page economic analysis was commissioned by the Consortium for `Common Food Names (CCFN), an international alliance of companies and organizations dedicated to preserving the right to use common food terms.
According to the study, consumers will choose imported cheeses with names they recognize over domestic products with names they don’t recognize. As a result, plummeting demand for domestic cheese would put numerous U.S. cheese manufacturers—particularly specialty cheese manufacturers—out of business.
"Europe's continued expansion of geographical indications in ways that protect terms long considered generic upends the entire concept of GIs," said Tom Suber, president of the U.S. Dairy Export Council, which represents the interests of dairy producers and processors in global trade and is the founding organization of CCFN. "Instead of protecting the names of a few specialty foods linked to specific areas, the EU uses GIs to eliminate competition for its producers."
Negative ripple effect through U.S. economy
This harm would not be limited to just the dairy sector. As the impact on dairy ripples through industries like transportation and veterinary services, the study said, the U.S. economy could lose up to 175,000 jobs. Also, consumers would face higher prices, fewer choices and confusion in the supermarket as familiar cheese names are replaced by unfamiliar ones.
“There's going to be a huge cost to us if we cannot use these (common cheese) names,” said Errico Auricchio, owner of BelGioioso Cheese, a Wisconsin company that epitomizes the fight to keep common cheese names.
"More than a century ago, my great-grandfather founded a cheese company in Italy based on a philosophy of excellence," Auricchio said. "In 1979, I moved my family to this country with the goal of continuing my great-grandfather's legacy. I want to craft the best Italian cheeses in the United States. It is companies like mine that will suffer greatly under Europe's totally unjustified plans to seize the right to use common cheese names for the exclusive use of European cheesemakers."
Auricchio also serves as chairman of the Consortium for Common Food Names.
At today’s prices, the decline in U.S. cheese consumption due to the loss of common food names could amount to $2.3 billion in lost sales in three years, and $5.2 billion in 10 years. It could push dairy farm balance sheets below the break-even point for six out of 10 future years, costing farmers a cumulative $59 billion in revenue and forcing several thousand family dairy farms out of business, the analysis added.
The study was unveiled jointly by CCFN and the three major U.S. dairy trade associations: the U.S. Dairy Export Council, the National Milk Producers Federation and the International Dairy Foods Association.
Statements from members of Congress and CCFN allies were also released.
“Europe’s plan to expand geographical indications will harm American farmers, manufacturers, and consumers,” said Rep. Paul Ryan of Wisconsin, the Speaker of the House. "Open and free trade cannot occur with this kind of GI system. Parmesan, feta, asiago, and many other Wisconsin cheeses have won international acclaim, and they should be able to compete fairly in the world market."
Another U.S. business threatened: Klondike Cheese Company
Feta is another common food name under threat―a fact not lost upon the Klondike Cheese Company, which has been producing award-winning feta cheese since 1988.
“We created an exceptional flavor profile that has been awarded championships from the World Champion Cheese Contest, United States Cheese Competition, and all the way down to our local county and state fairs,” says Teena Buholzer, marketing director at Klondike Cheese Company in Monroe, Wisconsin.
Consequently, American consumers have the opportunity to buy high-quality feta at a reasonable cost compared to imported feta.
“We have found that most of our consumers go to a store to purchase feta, then decide what type or brand,” Buholzer said. “Because of this, we use the word feta as the largest type style on our packaging,” she adds. “Without being able to use the word feta on the packaging, we would have to re-educate our consumers as to what cheese they would be buying.”
Asked what words Klondike Cheese Co. would put on the packaging if it couldn’t use “feta,” Buholzer responded, “I am not sure. We haven’t thought that one through yet.”
Issue remains a sticking point in T-TIP negotiations
The issue of common food names has become a major point of contention in the Transatlantic Trade and Investment Partnership (T-TIP), a trade and investment agreement being negotiated between the United States and the European Union (EU).
CCFN Executive Director Jaime Castaneda said the dairy industry appreciates the support of members of Congress, United States Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack to combat the illegitimate appropriation of common food names.
"To avoid severe consequences," said Castaneda, "the United States must aggressively oppose the carving up of markets and refuse to bestow monopolies on a few privileged European suppliers. The use of common names by the U.S. dairy industry-and indeed all other sectors relying on typical food terms-should be aggressively preserved, both for domestic and international use."
Mark O'Keefe is vice president of editorial services at the U.S. Dairy Export Council.
Learn more:
- Economic Study Shows Billions of Dollars in Losses to U.S. Dairy Industry Under Abusive EU Geographical Indications Policies
- Why Europe Must not own 'Parmesan' and 'Feta'
- EU's Threat to Common Cheese Names Hits Home
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The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post.
