The National Milk Producers Federation will be assuming management of the Real Seal.
Cheese importers cry foul on NMPF takeover of Real Seal program
On March 29, the National Milk Producers Federation (NMPF) announced it had assumed management of the "Real" ® Seal - the registered trademark that indicates to consumers that the product under the seal is a real dairy product made from U.S. ingredients.
The trademark is considered by advertising and marketing experts to be one of the most iconic and recognizable product integrity logos used in the food industry. The licensing and management of the REAL® Seal program was transferred from the United Dairy Industry Association (UDIA) to NMPF on March 15.
But it didn't take long for others in the dairy industry to cry foul.
A few days after the announcement of the program's transfer the Cheese Importers Association of America (CIAA) said management of the program by NMPF violates a law imposing fees on imported dairy products.
What they were referring to was that last August the U.S. Department of Agriculture extended the dairy checkoff to cover dairy products that are imported as well as milk produced in the United States. Importers must pay 7.5 cents per hundredweight equivalent on dairy-based imports.
Dairy producers pay 15 cents per hundredweight on all the milk they sell. Together, all the checkoff money is used by the National Dairy Board on its many promotion and research projects.
The bone of contention on the new management of the Real Seal program is this - the cheese importers said that USDA rules state that no funds from the National Dairy Board could be expended solely for the promotion of domestically produced products.
The cheese importers say that promotion of products under the Real Seal will discriminate against their imported products, and that's something they object to - especially since now they are paying "substantial amounts of money into U.S. promotion programs."
Ken Meyers, president of the CIAA, said "it is unfortunate that this action has been taken to circumvent the requirements that were clearly set forth by USDA.
"This action demonstrates a clear violation of U.S. trade obligations. If the National Milk Producers Federation plans to use checkoff monies that now include mandatory contributions by importers to promote domestically produced dairy products, importers may need to implement a program to tout the benefits of popular cheeses from countries, such as France, Italy, Denmark, Holland, Argentina, Australia and New Zealand," Meyers added.
This week, Tom Balmer, vice president of operations for NMPF, told Wisconsin State Farmer that his organization's management of the Real Seal is simply an outgrowth of the fact that his organization already had a program in place to monitor and maintain dairy product integrity, especially in the areas of product labeling and standards of identity.
"The dairy farmers who are our members want us to defend the integrity of dairy products. That's what we do," he said in a telephone interview.
National Milk is on record with concerns about misuse of common dairy terms being used to describe things that don't necessarily fit, he added.
The same goals were being sought after by the Real Seal program. Balmer said NMPF approached the UDIA which has jurisdiction over the program to see if they could work something out.
National Milk has arrived at an agreement with UDIA to license the Real Seal program for a period of years - though he declined to define the period of time this would cover.
Plans for the Real Seal now call for a reintroduction of the program to make sure consumers and the industry "know the importance of it and what it means.
"We want to put some vigor behind the program," Balmer said. The program currently has thousands of users, he added.
Balmer said he was disappointed that the cheese importers group hadn't "done their homework" before crying foul on the Real Seal program change and that their assertions were wrong.
The Real Seal program began in California in the 1970s when the state's dairy promotion organization was concerned about imitation cheese being marketed - especially for use on pizzas. In the later 70s the marketing emblem took off and was acquired by UDIA, which has the legal right to license it, Balmer explained.
Today there is concern about products being called "milk" when they are made from products like soy or rice. Balmer said a good administrative team is getting started on plans to renew the Real Seal program.
Dairy farmers care about the fact that there is an easy way for consumers to determine if what they are buying is an American-made dairy product, Balmer said.
The UDIA is a federation of 18 state and regional dairy research and promotion boards and it owns the Real Seal. While NMPF will now manage the licensing and marketing of the seal's program, ownership of the trademark remains with UDIA, Balmer explained.
In a statement released in response to the cheese importer's complaint, NMPF's president and chief executive officer Jerry Kozak noted that UDIA is a different organization from the National Dairy Board, something the cheese importers got wrong in their criticism of the move.
"When U.S. dairy farmers pay their 15 cents-per-hundredweight promotion assessment, 10 cents goes to state and regional promotion entities affiliated with UDIA or other qualified programs, and 5 cents goes to the NDB," Kozak said. "While the NDB and the UDIA created Dairy Management, Inc. (DMI) through which to share staff resources and maximize organizational efficiencies, the UDIA and the NDB remain separate and distinct entities."
The 7.5 cents-per-hundredweight import assessment that is paid by importers for promotion purposes is directed to the national dairy promotion program operated by the NDB. The import assessment is not paid to the UDIA, Kozak added.
Legislation that established the dairy import assessment does not impose limitations on how UDIA manages its assets, including the Real Seal, he said. "No funds from the NDB have been or will be used for National Milk's operation of the Real Seal program."