Italy channels most of its federal export promotion funds through the Institute for Foreign Trade (ICE), which is loosely controlled by the Comitato Interministeriale per la Programmazione Economica (CIPE). CIPE is an inter-ministerial economic planning committee with representatives from the ministry of agriculture, ministry of foreign trade, ICE, the Association of Italian Industrialists (Confindustria), and the three farmer organizations (Confagricoltura, Coldiretti, and CIA). Regional governments are becoming more involved in export promotion. Industry consortia also have been very active in export markets. Reliable estimates of export promotion expenditures are available only from ICE and one regional government, Emilia Romana. Expenditures were estimated at $15.4 million for ICE and $2.5 million for Emilia Romana.
ICE: Federal funding for ICE's 1996 export promotion programs has been adversely affected by the Government crisis. The restructuring of the Ministry of Agriculture and the lack of a stable government have hampered the adoption of an agricultural budget. Thus, there are no new Ministry of Agriculture funds for export promotion activities. The Ministry of Agriculture has only 3 billion lire (USD 1.9 million) in residual funds to allocate directly to consortium and association export promotion programs, and 11 billion lire (USD 7.1 million) in residual funds already allocated to ICE from previous budgets. The Ministry of Foreign Trade is allocating an additional 10 billion lire (USD 6.4 million) to cofinance ICE export promotion programs in 1996. ICE will also receive contributions from producer consortia and associations to fund its various activities. Attention is given to projects which benefit small- and medium-sized companies, although no funds are given directly to individual firms.
In the short and medium term, ICE's promotional activities are expected to continue to focus on maintaining or increasing Italy's market share in Europe for horticultural products, meats and cheeses and in the United States, for traditional Italian food exports such as wines, cheeses and confectionery products. ICE will continue with its typical promotion tools -- trade shows and advertising campaigns for a basket of products. ICE has participated in trade shows in Russia, Brazil and the Czech Republic, but lack of financing will limit ICE's interests in newer markets such as Singapore, China, Hong Kong, and Argentina.
ICE's promotional work in the United States is based out of their New York Office, under the auspices of a company called "Food and Wine from Italy". This group is supported primarily by ICE, but employees can also earn bonuses and free travel by meeting quotas for recruiting large groups of U.S. buyers for Italian trade shows or placing ads for individual Italian consortiums. The ICE New York office also underwrites a major press campaign in U.S. food industry journals (such as "Food and Wine" magazine). The four major producer groups who also contribute to the ICE New York office include: Parma Ham, Italian DOC Wine Exporters, Italian Cheese Producers and Exporters, and Italian Spirits exporters.
In addition, ICE has a regional U.S. influence through the Italian Consulates by organizing and, to a lesser extent funding, so called "Italian-American Chambers of Commerce". The primary goal of these informal business groups is to promote Italian exports to the United States and to increase U.S. investment in Italy. ICE assists with the initial charter of these Chambers and usually provides a phone number/headquarter in the local Italian Consulate trade office. Among the more active are the Boston and Houston area Chambers of Commerce.
Regional government promotions: The Italian regional governments are beginning to play an increasing role in export promotion, given that 85 percent of federal agricultural allocations now are under their control, rather than under the federal Ministry of Agriculture. Through grants and subsidies from the Italian state, the Italian regions are given free or reduced-cost space at all national food and agricultural shows. In general, the 20 Italian regions use the same criteria to allocate funds as ICE. Italian regional funds are channeled through consortia or cooperatives for advertising campaigns or trade show participation to promote "typical" or "denomination-controlled" Italian products such as Parma ham or Parmigiana Regiano. Recipients of regional funds must demonstrate and document their ability to promote exports. The amount devoted to export promotion varies by region and year.
An example of a region with an active export promotion program is that of Emilia Romana, which had a promotion budget of $2.5 million in 1995. A small share of the Emilia Romana budget was spent directly by the region on trade show participation. The remainder went to activities to promote horticultural products (49 percent), meat products (15 percent), dairy products (12 percent), flowers and nursery plants (3 percent), organic food (3 percent), honey (3 percent) and other products (12 percent) primarily in the leading EU markets in North America. Chief promotion activities are trade shows, in-store tastings, public relations aimed at the food press.
Producer consortia: Some examples of active producer groups, consortia, include the cheese, rice, meat, confectionery and wine consortia. The consortia work on their own, in conjunction with the Ministry of Agriculture and ICE, and together to promote their products in major EU and North American markets. In 1995, the Pecorino Romano (Cheese) Consortium spent approximately $1.2 million dollars on a multi media advertising campaign (radio, television, and magazines) in the United States. They received 80 percent of the funds for this activity from the Ministry of Agriculture. In addition to the advertising campaign, they participated in the Fancy Food show in New York. The region funded half the costs of the Consortium's participation in the show. The Ministry of Agriculture funded half the group's costs of participation in a show in San Diego. The Consortium benefited from ICE-subsidized booth space at ANUGA, the mega-food show in Germany.
The Italian Association of Rice Producers (Ente Risi) promotes consumption of rice in the Italian market and in a few, select European Union markets. The USA Rice Federation has a long standing cooperative effort with Ente Risi for the generic promotion of rice consumption in the United Kingdom. However, Ente Risi's budget is in difficulty and it is not clear what 1996 projects will be completed. Ente Risi is funded partly by producer checkoffs and partly by mandatory processor checkoff funds. The Italian Rice Millers Association has challenged this mandatory checkoff on the grounds that the benefits to Italian millers are marginal. The millers lost their case, but are appealing. In making the case against mandatory miller check-offs (to be paid at the mill gate before receipt of paddy rice), the millers charged that Ente Risi's budget did not do enough to promote rice, but instead supported a top-heavy research staff that did not assist the producers let alone the millers. Industry sources estimate miller funding to be over US$3 million. Producer funding may be slightly less.
The extremely well organized and competitive Parma Ham Consortium organized several promotional activities in Europe and the United States in 1994. For example, in France, the Consortium, in conjunction with ICE, published twelve full page color ads in the leading consumer magazines at the beginning of the summer and at the end of the year. A separate promotional and public relations campaign, financed in part by the Ministry of Agriculture, consisted of an information folder on the characteristics of Parma Ham, brochures on how to use and preserve Parma Ham; and point of sale materials including cartoon kits and store posters, as well as meat counter displays. A proof of purchase award game was also offered. The public relations activities focused on press releases in the leading newspapers and in women's and food magazines; recipe mailings; a conference and a working lunch in Paris with television and newspaper journalists on the regulations governing the production of Parma Ham; and a booth at SIAL (a leading food show). The Consortium also organized similar activities in Germany, Belgium, Great Britain and the United States.
One final example of an active producer consortium is the Chianti Classico Consortium, which is 100 percent member-financed (600 members in total, of which approximately 200 are bottlers). The Consortium export about 70 percent of its production, mainly to Germany, the United Kingdom and the United States. The Consortium participates in food shows and holds about 10 events per year in the larger cities of the importing countries. These events, attended by 2 to 3 persons from the Consortium and about 30 to 40 member wineries, consist of: press conferences, seminars for importers and distributors and wine tastings.