Parmigiano Reggiano: damage for over 150 million

Credit problem and information to consumers

Reggio Emilia, Italy, May 31, 2012 - Damage assessment has not yet been completed, but it is now almost certain that damage to the Parmigiano Reggiano system caused by the double earthquake of May 20 and 29 will exceed 150 million Euro. This figure includes damage to the product, plants and maturing facilities, after the shock of last Tuesday that caused the fall of 334,000 wheels (thus affecting an higher number of wheels than the previous shock, for a total of 633,700 damaged wheels). It also made 4 dairies unfit for use, which add to the one already unusable after the first shock of May 20.

"Damage to the product is certainly the most significant but not the only one." - said the President of the Parmigiano Reggiano Cheese Consortium, Giuseppe Alai, "Damage to the product accounts for two thirds of total damage. It refers to serious impairment of wheels below two months of maturation (which will be melted), impairment of wheels between 3 and 12 months, and therefore not yet complying with the Protected Designation of Origin standards (which represent the majority of damaged wheels and have become generic grating or melting cheese, with a loss of about 6 Euro/kg) and impairment of wheels that had already been matured and rated as PDO,which, due to the damage, will be sold at a price equivalent to that of generic cheese, with a loss of 2 Euro/ kg. "

"The damage assessment has not yet been completed - Alai says - but the consequences of the earthquake have already proved extremely serious and, since the earthquake, all the Consortium's work has been focused on this emergence (including the relocation of the cheese to suitable facilities and the agreements with food companies to manage the wheels that can no longer be matured and sold through traditional consumption channels in wedges), as well as on factors that could further escalate the situation. " "I am mainly referring - says the President of the Consortium - to possible financial consequences for dairies and for about 700 farmers that are partners of the dairies or supply milk to the same. This was the subject of the meetings with the Emilia-Romagna section of the Italian Banking Association. These consequences are quite possible, given the loss of the product that is often used as security for credit lines, but must be absolutely prevented".

In order to ensure that farmers and dairies continue in business in this emergency situation, the Consortium has already asked the Minister of Agriculture, Mr. Catania, and the Government, for a 12 months moratorium on short-term loans, for the identification of disposal channels for the damaged product, for early allocation of CAP grants and for the suspension - already obtained - of the last instalment of the super levy on milk quotas, which have however not exceeded the limits set by the EU.

Based on what Mr. Alai calls "an extraordinary mobilization of consumers, associations, institutions of various kinds, parishes, businesses and individuals", the President of the Consortium gives detailed information. “In the next few days – says Alai - large-scale solidarity operations will be started by large retailers (the one agreed on with Coop Italia will be the first one to start on June 11). Specifically, for each wedge of Parmigiano Reggiano sold at the current prices, large retailers will give a contribution (1 Euro/kg) to the dairies hit by the earthquake; buying Parmigiano Reggiano is, therefore, the simplest way to ensure immediate help and to avoid speculations. However, for anyone wanting to buy cheese directly from the damaged dairies (if possible in amounts compatible with the obvious difficulties in management at this stage), the Consortium has made available (both on its website and by direct contact with the Consortium offices) a list of the dairies concerned and with experience in direct selling, thus also guaranteeing the product quality and properly protecting consumers, whose generosity must not be exploited by improvised and speculative transactions”.