It is perhaps the ultimate success story: an Italian maker of Grana Padano sets up shop in the Czech Republic and produces such a fine version of the world famous hard cheese, that he then starts exporting it back to the country where it was invented. That has inevitably made him a target of Italian protectionists who claim EU “geographical indications” (GIs) on many the country’s world famous products.
The family of the entrepreneur in question, Roberto Brazzale, has been involved in the production of the Parmesan-style grana cheese and butter for more than 200 years. Today, the family company Brazzale owns brands such as Alpilatte, Asiago DOP, Grana Padano DOP, Burro delle Alpi butter and Zogi, a range of cheeses and pastes.
In the 1990s Brazzale began thinking about moving some of his production to elsewhere in Europe where there was high quality and cheap milk. He reviewed several Central and Eastern European countries, and picked the Czech Republic mainly because of the superior quality of milk and the environmental standards there.
From the beginning of 2000 Brazzale began producing cheese in the Czech Republic. Today, his factory in Litovel is the single biggest traditional hard cheese producing plant in the world with 180mn litres of milk processed a year, 80% of which is used for hard cheese production. By comparison, the biggest Czech dairy producer Madeta processed just 400mn litres of milk a year at its five plants to make a whole range of products: milk, butter, cream, cheeses, curds and desserts. Annually, Gran Moravia produces about 10,000 tonnes of hard cheese and has a turnover of €65mn. That is huge volume given that all makers of Parmigiano Reggiano, about 600 factories, produce just 124,607 tonnes a year.
“Czechs are very organized people, precise state regulation, but not so aggressive towards entrepreneurs, as in Italy. Moreover, taxes on wages and social payments are lower. The agricultural industry is very strong, the quality of livestock absolutely great and the staff are highly qualified. Most importantly, though, is a very high quality of milk, which is in no way inferior to the Italian, but it is one-third cheaper, which ultimately has a directly proportional effect on the final price of the cheese,” Brazzale tells bne IntelliNews in an interview.
Everything in cheese making should be done where it is most appropriate, according to Brazzale. This logic applies to all processes in the company: aging, ripening, packaging, logistics, administration and marketing are still carried out in Italy, while the Czech branch produces Gran Moravia cheese and works with retailers worldwide.
Even though much of the work is still carried out in Italy and Gran Moravia is indistinguishable (some even say even better) from many official Grana Padano cheeses, Brazzale is prevented from identifying it as such, given that the Italian cheese is one of many products that are on an ever-growing EU list of Protected Designation of Origin (PDO) products.
Brazzale is against this kind of protectionism by Italian firms, calling it “the ultimate, desperate card for those seeking protection”. He argues that the strict decrees over the “geographical indications” on all aspects of the products makes no sense; rather it should be about how much of Italy is in a product. “Gran Moravia can be defined an Italian product, because it’s a grana cheese of our tradition, made in a cheese plant which is totally Italian, in terms of technology and ownership, even if it’s located in the Czech Moravian region with production processes governed by Italian personnel using milk produced in Moravia according to specifications devised and implemented by Italians,” he points out.
These GIs also limit the reach of the Italian cheese; the Italian area cannot produce enough milk to satisfy the potential global demand for grana cheese, while dictating that the cheese must be use animal rather than vegetable rennet means local cheese-makers can’t make products for vegetarians. “Italy has committed the error of confining itself in a grotesque self-congratulatory protectionism,” he says. “This system is slowly and inevitably confining Italian agriculture to an unsustainable and very dangerous underdevelopment erroneously confused with tradition. What are the remedies? More competition, less political interference, more technology, greater openness to the world and more courage from entrepreneurs.”
For aging and ripening, Gran Moravia is sent to Italy, where about 70% remains there for the local market (Gran Moravia is the biggest exporter of hard cheese to Italy). Only 5% of the cheese is sold on the Czech market, while the rest is exported to more than 50 countries. After Italy, the Russian market was the largest in terms of volume of cheese exported, generating about €4.2mn of revenues a year, about 10% of the total. However, the counter-sanctions that Russia imposed on EU food products in response to the West’s sanctions on Russia over its aggression in Ukraine has killed this business for Brazzale.
“We are convinced that is the worst choice for Europe, worst choice for Russia. Protectionism is bad, you cannot develop a healthy economy without competition. You need competition, we need competition, we need to cooperate to grow. We cannot be Europe without Russia, and Russia without Europe,” he says.
Before the West imposed sanctions on Russia, Brazzale had been preparing to launch a new cheese production plant in Russia, but now says he will continue this process only after the lifting of sanctions. Instead, Brazzale opened up a cheese-making factory in China, which has replaced Russia as Gran Moravia’s biggest market outside of Italy. While the consumption of milk products in China is still relatively low, the market has huge capacity to grow, says Brazzale. Gran Moravia represents right now around 40% of all Chinese imports of hard cheese.
“We want to grow organically with the market. This is a family-run business, so there is no fear of long-term investments – we have time,” says Brazzale.