Plugging holes in the cheese industry

Switzerland's cheese industry has been on the rack in recent times Keystone Archive

Given the constant drip of doom and gloom stories one could be forgiven for thinking that Switzerland's cheese industry is in a state of meltdown.

Franz Meier, president of Emmentaler Switzerland, has predicted that half the country’s cheese makers would go under by 2010: businesses are closing every month.

Over the past decade, the noose has slowly tightened around the neck of the Swiss cheese industry. The World Trade Organization’s Agriculture Agreement, created to improve market access and reduce export subsidies, provided the initial squeeze.

In 1999, the Swiss government introduced its own package of agricultural reforms, scrapping the Swiss Cheese Union that for 85 years had bought every kilo of Emmentaler, Gruyere and Sbrinz cheese at a guaranteed price.

Further pressure is expected to come to bear on the industry as the bilateral accord on agriculture signed between Switzerland and the European Union comes into effect in May this year, making it easier to import and export cheese.

According to the Federal Office for Agriculture, over the next five years, the Swiss import tax on foreign cheese will be reduced by 20 per cent a year until there is a level playing field.

Open borders

“It’s harder now because there’s competition and within five years, there will be open borders,” Jürg Jordi, an agriculture office spokesman, told swissinfo. “Before, there were fixed prices and fixed quotas set by the government. Now it’s more or less a free market for cheese in Switzerland.”

However, instead of running up the white flag, the Association of Swiss Cheese Producers is predicting a stronger, streamlined industry with the emphasis on quality not quantity.

Olivier Isler, the organisation’s quality manager, concedes that certain sectors of the industry have been badly hit – notably Emmentaler, which accounts for around a third of all the cheese produced in Switzerland. But he argues that Emmentaler’s fate, which he blames on over-production and an ensuing fall in prices, is not representative of the industry as a whole.

Isler says production of Gruyere, Appenzeller, Tête de Moine and other speciality cheese is now in better health thanks to improved working practices and marketing, limits on production and higher quality cheeses. Emmentaler cheese makers who have moved with the times and now produce quality, traditional cheese have also managed to ride out the storm.

Statistics issued by the association tend to support this theory. Latest figures show that from 1999 to 2000, Swiss cheese production actually rose from 134,306 to 146,315 tons. Yet over the same period roughly 100 cheese makers went out of business, mainly producers of Emmentaler and Sbrinz.

Market conditions

“In the past, the state, through its support and subsidies, created the market conditions for the Swiss cheese industry and it’s true that since 1999 all that has disappeared,” says Isler.

“However since then market forces have forced the industry to become stronger than it was during the Nineties – despite the fact that actual numbers have fallen. What we are now seeing is the logical outcome of the industry adapting to a free market.”

Isler concedes that further losses are unavoidable, as some cheese producers find themselves unable to cope with the extra challenges they face.

He says Swiss producers encounter higher transport and labour costs as well as tougher environmental controls than in neighbouring countries. Furthermore, the cost of a litre of milk is up to 20 centimes more expensive in Switzerland.

“There is a future for Swiss cheese makers, but they must concentrate on speciality cheeses with higher profit margins such as Gruyere, Appenzeller and Tête de Moine, which are top quality products and can find a niche in the export market as well as remaining market leaders in Switzerland,” explains Isler.

by Adam Beaumont