Arla Foods upbeat on EU feta ruling

By Chris Mercer

- Last updated on GMT

Related tags Feta European union Denmark Arla

The European Court of Justice's feta ruling may give sole rights to
Greece, yet one of Europe's leading dairy producers has been
preparing for years to find a way round the new rules.

The Court said Tuesday that the name 'feta' had not become generic and was reserved exclusively for the cubes of Greek cheese made from sheep's milk and preserved in brine.

The ruling upheld the Commission's decision to make feta a protected designation of origin (PDO) of Greece in 2002, despite strong opposition from Denmark and Germany, who were also supported by Britain and France.

Yet, for Scandinavian dairy firm Arla Foods, which produces around 30,000 tonnes of feta every year in Denmark, attack may prove the best form of defence.

"We anticipated the outcome so it was not a shock as such,"​ said Arla spokesperson Astrid Nielsen. Arla's feta production is currently worth between €67m and €80m.

She said the group had spent the last four or five years developing and promoting its own feta brand called Apetina Feta, made from cow's milk. Feta will now have to be removed from the name, but "hopefully we have developed some sort of connection between Apetina and feta"​.

Nielsen said Arla had recently spent £5m improving feta production facilities and that this is "one of the cheeses we will focus on in the future"​. The group is already one of the EU's biggest feta exporters.

There are question marks over how much of the market Greece can supply, with Germany, France and Denmark producing just short of 100,000 tonnes of feta per year - worth around €500m and making up almost half of the EU production.

Greece and the department of Lesbos currently produce around 115,000 tonnes of feta each year, with more than 85 per cent of EU feta eaten there.

Nielsen said Arla was now the leading feta supplier to Scandinavia and Holland and that demand for feta in Europe was growing, thanks to its use as an inspiration for new recipes and the convenience factor of putting ready-made feta cubes into salads.

Arla has also worked hard to develop its Three Cows feta brand in the Middle East, which is not bound by the EU ruling; although feta was included in a list of 41 products the EU wants to get global protection for at the up-coming World Trade Organisation meeting in Hong Kong. The US and Australia hotly opposed the move.

Nielsen said Arla's biggest worry was that the feta ruling may spark a series of copy-cat cases, where a flurry of different local producers could apply to get PDO's on their products.

She pointed to the Swiss seeking protection for emmental and the on-going Parmesan debate as examples. "It is easy to see how others could follow. This could make it difficult for us."

Another potential danger is that PDO cheeses and products could come to dominate higher value, premium segments in the market due to their authenticity.

For now, Arla is certainly in a tight spot on feta, but Nielsen said only time would tell.

"We believe there's a market for the kind of feta we produce here,"​ she said, adding that clever marketing would be key. The firm has ruled out moving production to Greece for now after a bad experience there in the past.

About 40 per cent of EU citizens said they were willing to pay a 10 per cent premium for specially designated products, according to a separate Commission survey recently.

All those producing feta outside of Greece will have to stop using 'feta' by the end of next year.

UK Conservative MEP Edward McMillan-Scott, defending Britain's only feta maker, said the tough restriction was unnecessary. "Shepherd's Purse Cheeses in my home region of North Yorkshire has been producing this stuff for years."

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