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California and the West

Ads May Soon Say More Than Cheese

Government: Dairy producers and the Milk Advisory Board want to be able to advertise specific brands. Measure has passed the Assembly and is in state Senate committees.


SACRAMENTO — The catchy California advertising campaign that trumpets, "It's the cheese," brings smiles to motorists and TV viewers alike.

"Why does El Nino keep coming back?" asks one billboard, "It's the cheese."

But the ads, part of a blitz sanctioned by the state, mask a feud simmering in the dairy industry. While most like the snappy ads, critics worry that soon such ads could work against them.

Dairyman Mike Gallo, a nephew of the famous winemakers, says some dairy producers are pushing legislation in Sacramento designed to lift a 61-year-old state restriction on brand-name advertising for such dairy products as butter and cheese.

"This would allow the California Milk Advisory Board to specifically choose brands to promote and advertise and discriminate against others," contended Gallo, a San Joaquin Valley cheese producer. "It would allow [them] to promote a private label brand. A Wal-Mart brand."

Nonsense, fired back Adri Boudewyn, the advisory board's executive director. The California Milk Advisory Board spends $18 million a year--collected from the state's dairy producers--to advertise generic California cheese.

"We have no intent on allowing brand-name advertising," Boudewyn said.

He insisted that a proposal by Assemblyman Roy Ashburn (R-Bakersfield), which would allow promotions of brand-name butter and cheese using discount coupons, is a limited legislative fix intended to drum up sales in supermarkets.

On Wednesday, the Senate Agriculture and Water Committee approved the measure and sent it to the Appropriations Committee. It previously had sailed through the Assembly.

A central issue in the dispute is the best way for the state to promote sales of all California-made cheese--from mozzarella and Monterey jack to cheddar and Swiss.

Now, cheese is marketed generically under Depression-era directives known as "marketing orders," which cover a gamut of agricultural products, from fruit to cheese.

The marketing orders allow producers to work together to solve mutual industry problems and assess themselves a charge to raise promotional funds for generic advertising of their products.

Sixty years ago, when the directives went into effect, dairy products were sold through mom and pop stores that stocked a limited number of items. Advertising was confined to newspapers and some billboards.

Today, much has changed. Most dairy products are sold by grocery store chains, and California's dairy industry is booming. Farmers are selling $3.7 billion a year in milk products, and cheese is widely marketed, especially through TV and radio.

Even so, backers of Ashburn's bill say the state marketing orders need to be updated as a way to boost sales of California milk products.

"It's a competitive market and we're trying to move more discounts to the consumer," said Gary Conover, a lobbyist for the Western United Dairymen, an association of 1,200 dairies sponsoring the measure.

Currently, the dairy board redeems generic discount coupons for California cheese. The Ashburn bill would allow specific brands to tag onto the promotion with their own labeled discount coupons for a period of five years.

Lawmakers must weigh whether, as critics maintain, the measure would give an unfair advantage to some dairies. Will it allow, for example, the assessments collected from one dairy farmer to be used to promote the products of a rival dairy?

Gallo, chief executive officer of Merced County-based Joseph Farms, suggested in an interview that one goal of the bill is to promote store-brand cheeses.

In his view, supporters of the bill "want to promote [certain] brands . . . and discriminate against other brands."

The state Department of Food and Agriculture, which has not taken a position on the bill, raised a similar question in a Jan. 28 analysis of the Ashburn proposal.

The analysis cited, for example, how within the past year the milk board considered "an ad in which a specific maker of pizza extolled his pizza as the best because of California cheese.

"Such an ad would be permitted under [the Ashburn bill] . . . and . . . would open the door to significant exposure to lawsuits from competitors who also pay assessments into the fund" used to promote cheese as a generic product.

Supporters dismiss such criticism.

Ashburn, whose district includes the state's dairy heartland in Tulare County, said his proposal would give the cheese industry an updated tool to battle out-of-state competitors "who are able to go after our consumers in a way that producers in our own state cannot."

"This bill is about giving the consumer the opportunity to have coupons, discounts and modern promotions," Ashburn said.

Consumers Union, however, maintains that the bill is unfriendly to consumers. The organization, which publishes Consumer Reports magazine, is attempting to use the debate over the Ashburn proposal to take aim at the state's marketing orders, which boost and control a broad range of products produced by California's huge agricultural industry.

"California government should not be in the business of selling cheese and butter at all," said Harry Snyder, a lobbyist for Consumers Union.

In a letter last month to lawmakers, Snyder said: "Instead of enhancing these marketing order programs that force all competitors to pay into one government-sanctioned advertising pot, these programs should be phased out by a certain date."

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