Flour milling industry in Italy

by Teresa Acklin
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   The non-durum flour milling industry in Italy traditionally has been fragmented. Small, family-operated mills, many with capacities of as low as 30 tonnes per day, tended to predominate.

   Since 1980, the situation has begun to change. From 1980 to 1990, the number of wheat flour mills declined by 23% to slightly more than 800, according to a report published by the International Milling Association. In the same period, total milling capacity dropped by 17% to 10.8 million tonnes.

   In addition, capacity is becoming concentrated in larger mills. In 1990, some 12% of mills had a daily capacity of more than 1,000 tonnes, yet they accounted for about 50% of total capacity. Mills in the range of 501 tonnes to 1,000 tonnes accounted for another 21% of the country's total, according to the I.M.A. report But the industry in 1990 also continued to experience excess capacity. According to the I.M.A. report, the 1990 utilization rate was 59% for high-capacity mills, defined as those using a gradual-selection milling process.

   Still, the industry over time should become more efficient and streamlined, milling officials said. This trend will continue to be encouraged by a 1987 law enacted specifically to begin the process of rationalization in the milling industry.

   Since 1949, flour production in Italy has required a license. Mills are grouped into two categories, high or low capacity, depending on whether the facility employs a gradual-selection milling process.

   The licensing requirement provides a direct mechanism for the government to influence the rationalization effort. License approval for new mill construction or expansion now is tied to a corresponding absorption of an equal amount of existing milling capacity.

   The government also is increasing its efforts to strengthen environmental and health regulations for the milling industry. These developments may hasten rationalization, as some mills are likely to close rather than make the required investments to meet the regulations.

   In addition to the rationalization program, legislation regulates other aspects of the milling industry. For example, the use of additives in flour is prohibited, and ash content must be declared. Labeling, packaging and distribution also are regulated. Prices for wheat and flour, however, are unregulated, and change according to market forces.

   Italy's milling industry tends to be geographically concentrated in the country's northern third, with 56% of the mills, representing 60% of total capacity, in that area. Italy's central region is home to 30% of the mills with 27% of national capacity, while the southern third accounts for only 14% of facilities and 13% of capacity.

   Italy's 1988-1992 average annual non-durum wheat consumption stands at about 8.3 million tonnes, with milling use accounting for 6.3 million. About half of Italy's total wheat needs are filled by imports each year, a percentage that may increase if Common Agricultural Policy reforms encourage Italy's growers to switch to fruits and vegetables or other crops.

   French wheat dominates Italy's import market. In the five years ending in 1992, France averaged a 63% share of Italian imports, with the U.K. a distant second at 16%. High-protein wheat from Canada and the U.S., used for blending, generally accounts for 10% to 15%.

   The Italian milling industry is extremely sensitive to wheat quality, and millers set precise parameters as to what is acceptable. The Chopin Alveograph is the industry's standard test for quality, and the Falling Numbers test also is used regularly. Other testing procedures and mechanisms carry less weight in quality assessment.

   Some 65% of Italy's non-durum flour production is used by the domestic baking industry, which consists of mostly small- to medium-size bakeries. About 8% of flour production is used for confectionery purposes, with the remaining flour evenly divided between household and pizza uses. Although annual flour exports more than doubled between 1988 and 1992, only 10% to 15% of flour production is exported each year.

   Italy's per capita flour consumption in 1991, excluding durum flour, was 73 kg, down slightly from 1980. Still, Italy in 1991-92 recorded Western Europe's highest per capita flour consumption rate. Italy's consumption of bread — excluding pizza, but including bread made from durum wheat — also has declined since 1980, with per capita consumption dropping steadily to 71 kg in 1991 from near 80 kg in 1980. But despite the decline, Italy's bread consumption in 1991-92 remained among Europe's highest, second only to Germany's level of about 76 kg.