Report: EU victory on food names would be disaster for US dairy

WASHINGTON, Oct. 12, 2016 - A new report by Informa Economics IEG warns that the American dairy industry stands to lose billions of dollars if the U.S. were to agree to EU demands that hundreds of cheese names only be used by European producers in specific geographical regions.

The report was commissioned by the Consortium for Common Food Names, which is supported by the American Farm Bureau Federation, the International Dairy Foods Association and other U.S. and Canadian ag groups.

The EU campaign to restrict food names has become one of the most contentious issues in negotiations with the U.S. over the Transatlantic Trade and Investment Partnership (T-TIP).

U.S. groups like the National Milk Producers Federation (NMPF) are urging U.S. negotiators to fight back and protect American companies’ ability to produce and sell products like Asiago cheese, even if it’s not made on the Asiago plateau in the Veneto region of Italy.

If the U.S. dairy sector was unable to use what producers consider common product names like Asiago, feta and Parmesan, the damage would be severe, forcing some farms to eventually shut down completely, according to the report.

The study concludes that if the EU were to have its way on so-called Protected Geographical Indications (PGIs), there would be a 21 percent reduction in cheese consumption over 10 years, costing the dairy industry about $5.2 billion in lost sales.

“The damage Europe’s GI agenda could do to the U.S. dairy industry is severe,” NMPF Chief Executive Jim Mulhern said in a statement. “By 2025, our dairy farmers would lose up to 15 percent of their income and the U.S. dairy herd would shrink by up to 9 percent, or 850,000 cows. Thousands of dairy farmers would be forced out of business.”

CCFN Executive Director Jaime Castaneda told reporters in a teleconference that consumers want to buy cheeses with names like Asiago, Havarti, Parmesan and Gruyere. If the U.S. producers are forced to rename their cheeses, shoppers would be confused and sales would fall, he said. The report backs up Castaneda’s concern. One conclusion in the 60-page study is that U.S. milk prices would drop by 5 percent to 12 percent over the first three years.

“Europe’s GI policies could ultimately ban the use of hundreds of common names in the United States and around the world, thereby impacting not only the companies producing those products but also their workers and supplying farmers,” the CCFN said. “It would force award-winning U.S. cheese makers out of markets they have worked for generations to create. U.S. manufacturers would face a choice of simply abandoning these markets or selling their products under unfamiliar names like ‘crumbly white cheese’ or ‘hard grated cheese.’”  

Tom Suber, president of the U.S. Dairy Export Council, said USDA and the Office of the U.S. Trade Representative are squarely on the side of the consortium. He said the industry-sponsored report released today will give U.S. negotiators “analytical backing” as they argue with their European counterparts.

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