THE CONSORTIUM FOR THE PROTECTION OF PARMIGIANO-REGGIANO (Conclusion of the investigation)
PRESS RELEASE
The Italian Competition Authority concluded its proceeding initiated last November, with regards to the production plans prepared and carried out by the Consortia for the Protection of Parmigiano Reggiano and Grana-Padano. Following the remarks made by the Authority during the investigation, the two Consortia decided to amend their planning guidelines, in such a way as to make them compatible with the antitrust law.
The amendments of the planning rules, which are set forth in the specific regulations arranged by the Consortia themselves, will transform the planning mechanism into a control system of the production requests made by each member of the two Consortia.
On the basis of the new principles, in the future the Consortia will limit themselves to gather the requests made by the single cheese dairies, after having ascertained their capacity of producing quality cheese. Further, the two Consortia will define a total production target, whose value will be merely indicative. The documents filed with the Authority by the Consortia provide the concrete ways of applying the new planning rules, but do not contain the changes to be made in the Consortia's specific regulations, so as to realize a system of rules which is not restrictive of competition. Therefore the Authority required both the Consortia to file the amendments of their regulations, within 90 days of the notification of the decision.
With regards to the past years, the Authority decided that the production plans, the specific regulations and the relative enforcement acts, adopted by the Consortium for the Protection of Parmigiano-Reggiano for the cheesemaking dairy campaigns from 1991 to 1994, constituted a violation of Section 2 of Law no. 287/90 (agreements). In addition, the Authority ruled that the decisions concerning the 1991-1995 production plans as well as the specific regulations applied in 1994 and 1995 also violated Section 2 of the mentioned Law. Indeed, these plans and regulations fixed, on the one hand, the maximum quantity of the total production for the reference year; on the other hand, the annual production share that each cheesemaker had not to exceed. Even the agreement protocol undersigned by the two Consortia in 1994 - and subsequently no longer renewed - which fixed a maximum threshold of Grana cheese production, by assigning 51 percent of the total production to the Consortium for the Protection of Parmigiano-Reggiano, and 49 percent left to the Grana-Padano Consortium, constitutes an infringement of the Competition Act.
As such, the Authority issued a cease and desist order to the Consortia.
The Consortium for the Protection of Parmigiano-Reggiano is the association of approximately 600 cheese dairies located in the provinces of Reggio Emilia, Parma, Modena, Bologna on the left bank of the Reno river and Mantova on the right bank of the Po river. The Grana-Padano Consortium is the association of about 300 producers working in Piemonte, Lombardia, Trentino, Veneto and Emilia-Romagna. In 1994, the domestic consumption of grana cheese accounted for approximately 2,084,000 quintals. Over 90 percent of this value is given by the production of cheese dairies which are members of the two Consortia.
The proceeding originated from a complaint of the Ministry of Industry and Commerce, filed with the Authority in June 1995. In its document, the Ministry requested the Authority to ascertain the presence of anticompetitive behaviours in the Parmigiano Reggiano dairy sector. In November 1995, the Authority started a proceeding, considering that the Consortia's specific regulations, the production plans and the agreement protocol between the two organizations could violate the Competition Act.