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Reducing cheese trade barriers strengthened Swiss market - report

By Mark Astley , 31-Oct-2012

Reducing cheese trade barriers strengthened Swiss market - report

The reduction of cheese trade barriers between Switzerland and the European Union (EU) in 2007 has resulted in increased market competition and strengthened the Swiss cheese industry, a government-commissioned study has found.

Bilateral agreements with the EU and World Trade Organisation (WTO) requirements left the Swiss government obliged to open up the country’s cheese market in June 2007.

In advance, the government reduced protective duties and export subsidies, and abolished milk price guarantees and quotas in an effort to improve competitiveness in the market.

The report, Evaluation and Impact of Free Cheese Trade between Switzerland and the EU, found that as a direct result of the policy changes, consumers now have a wider product choice, quality has increased, and prices are generally lower.

Economic think tank BAK Basel was commissioned by the Swiss Federal Office for Agriculture to assess the impact of the free market on dairy production and consumers.

Export, import increase

The BAK Basel report concluded that the negative growth trend experienced by the Swiss cheese industry in the 1990s would have continued if trade barriers had not been removed.

Swiss cheese exports have, however, been on the increase since 2003. Cheese imports from EU countries have also increased, with Italian, French and German-manufactured cheese products driving the growth.

“Simple simulations suggest that without cheese free trade, the negative trend in Swiss cheese exports during the 1990s would have continued, import increases would have been lower, and consumption of cheese would not have grown to such an extent,” said the BAK Basel report.

“The reciprocal liberalisation of the cheese trade between Switzerland and the EU promoted improvements in quality and innovation in the Swiss cheese industry, led to an increase in exports, reduced trade surplus despite stronger growing imports, and enlarged the range of varieties.”

“A prolonged closure of the cheese market would have led to no better economic situation that with free trade.”

“Overall, the competitiveness of the cheese industry strengthened and consumes have benefited from a greater range of products and lower prices,” the report added.

Cheese production increase

Cheese production in Switzerland has increased alongside the reported cheese import and export growth.

Between 2003 and 2011, cheese production in the country increased by 21,000 tonnes to a total of 128,000 tonnes. The report has attributed the growth to an increase in demand for fresh and semi-hard cheeses.

Since 2000, cheese consumption by Swiss consumers has also increased. The 12% increase to 21.44kg is “significantly higher than in surrounding countries”, the BAK Basel report added.