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Parmesan cheese
Parmesan damaged by the earthquake is being sold at a lower price. Photograph: Elisabetta Baracchi/EPA
Parmesan damaged by the earthquake is being sold at a lower price. Photograph: Elisabetta Baracchi/EPA

Wrecked warehouses and toppled cheeses: Italy counts cost of quakes

This article is more than 11 years old
The last thing Italy needed was a disaster costing billions of euros in its most productive region. But that was what happened

Sabrina Federzoni steps gingerly into a puddle of syrupy, black balsamic vinegar pooling at the bottom of a curved iron staircase. "It is slippery. Be careful," she warns as she surveys the attic scene: oak casks, some dating back to 1912 when her great-grandmother founded the Monari Federzoni balsamic vinegar operation, lie in a jumble, rivulets of "black gold" seeping from their cracked seams on to the grey cement floor.

"It takes years to make this product," says Federzoni, whose family business exports 70% of its vinegar to 50 countries, including Britain. "To see it ruined like this, it is so sad."

The wave of seismic activity that began on 20 May in northern Italy ruined 100,000 bottles, two 40,000-litre (8,800-gallon) tanks and 60 oak barrels, and caused a shed to collapse on to two new tractors and other equipment used for the autumn grape harvest.

Yet the €1m (£809,000) damage to this one business alone is just a drop in the barrel of the €5bn blow to Italy's already fragile economy from a series of earthquakes in this industrious swath of Emilia-Romagna, the heart of "made in Italy".

The two big ones, on 20 and 29 May, killed 24 people. Over half of those died at work, some in factories certified safe after the first quake. Dozens of manufacturing plants, farmhouses and agricultural outbuildings dotting the Po river plain collapsed, along with ancient churches, towers and monuments.

Incessant aftershocks have complicated the recovery, terrorising 16,000 weary displaced residents still waiting to return home, preventing businesses from reopening and adding layers of logistical snags to safety checks. Few individuals or businesses had earthquake insurance, since the area was not zoned as a high-risk seismic area; the government is now expected to redraw its map.

Since the quakes began, the epicentres have shifted slightly west, with an impact radius bordered by Modena and Reggio Emilia to the west, Mantua to the north, Ferrara to the east and Bologna to the south.

While geographically small, the area packs an extremely big economic punch. Five sectors have been hammered: food/agribusiness, biomedical, precision machining, ceramics and textiles.

Italian union officials estimate 20,000 workers in 3,500 companies are temporarily laid off, their jobs at risk. Local officials also quietly fear that some large biomedical multinationals may choose to close damaged factories and start anew elsewhere.

Prime minister Mario Monti's government declared a state of emergency, raised the petrol tax by two cents, to fund relief, and delayed taxes and mortgage payments for residents affected. The authorities are considering putting some prison inmates to work rebuilding. But the economic impact extends far beyond Italy's borders.

"I have just seen the full scope of devastation, which shocked me," said the EU commissioner for regional policy, Johannes Hahn, after a visit this week, in which he suggested using the EU solidarity fund and other reallocated funds for reconstruction.

Production lines that export worldwide have been halted, stopping the flow of car industry components and tiles and ceramics for housing and construction; the ceramics sector alone has lost €100m in damage and 1,300 jobs.

Also hard hit is the thriving food and agribusiness sector, whose parmesan cheese, Parma ham, balsamic vinegar, fruit and other products are laid out on Europeans' tables every day. The sector has suffered an estimated €500m in damage.

But perhaps most worrying is the damage to the biomedical district in Mirandola, north of Modena, where 140 companies employ 15,000 people and do €3.6bn of business a year. With more than 70 patents in the last decade, this industrial cluster is one of the largest concentrations of biomedical firms in Europe, lagging only a little behind similar "areas of excellence" in Los Angeles and Minneapolis.

Some leading manufacturers of disposable medical devices and apparatus used for dialysis, transfusion and lifesaving surgeries (including artificial hearts and lungs, oxygenators and the sterile surgery kits that are used in hospitals throughout Europe) are located here.

The big multinationals – Swedish firm Gambro, Germany's B Braun Avitum and Fresenius, and the US-listed companies Sorin and Covidien among them – are still deciding how, when and whether to reopen. Many require sterile, clean rooms and complex certifications: things disrupted by the quake. Sorin's plant has been closed since 20 May. Meanwhile, orders are stacking up for products such as the medical disposables made by Haemotronic, which has been closed since its warehouse collapsed, killing four workers.

There is indirect impact, too. While big-name motor industry firms including Ferrari and Ducati were harmed only indirectly, some component suppliers were hit badly. While most prosciutto hams in Parma were spared, hundreds of nearby pork and dairy producers who supply meat and milk products for the ham, salami and cheese industries are struggling to feed their animals as feed stocks and hay lie under collapsed barns. Orchardists and vegetable producers lost storage facilities, too.

"This year, I will not plant any more onions, potatoes and watermelons, like I always have," said Giovanni Golinelli, 65, a small farmer near Bondeno. "I will plant only sorghum and wheat: products that don't need my warehouses so I can take them straight to intermediaries. Biodiversity will be lost, but what can I do?"

In the Caretti parmigiano reggiano cheese storage facility, north of Bologna, two factors remain constant: the 18C temperature and 80% humidity. But the 22,000 wheels of parmesan, once neatly stacked 200 at a time on high, shelving walls, have all tumbled down: 160 tonnes of damaged cheese, toppled like stacks of dominos.

"We thought, 'Maybe we've lost 100,'" said Caretti's quality control manager, Dario Biglietto, standing at the foot of the cheese mountain. "But to open the doors and see this – it was a terrible shock."

The damaged rounds will be sold discounted to manufacturers for melting down. But it is a race against time, with oxidation threatening to prohibit consumption, Biglietto sa.

In the €1.2bn parmesan industry, 40kg (6st 3lb) wheels are aged between 12 and 24 months, then sold for over €700 apiece. Industry associations reported 981,800 wheels of cheese were damaged, including 631,800 of Parmigiano Reggiano and 350,000 of Grana Padano. That's nearly a third of the parmesan produced annually.

"There will be repercussions on the global market," said Valerio Caretti, whose generation is the third to work in the business since 1928. "There are only so many produced each year, and this percentage of loss is too high." Exporters, restaurants and other intermediaries have swarmed in to buy, pushing short-term prices down. But since parmesan is aged, the real consumer crunch, Caretti warns, will be felt in six months' time.

For now, a "solidarity cheese" initiative, begun by the farmers' association Coldiretti, has kickstarted sales to the public. At the Caretti sales point, dozens of locals were lined up to get their share.

"It is still excellent cheese, even when broken open," said Marilena Lazzari, who came with her 85-year-old aunt from Ferrara. "But I am here to try to help these poor people. Italy's economy is in bad enough shape already."

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