MILAN (Reuters) - For the Italian government, it seemed like a recipe for success: create an official “Made in Italy” logo to defend the country’s finest food exports from an army of foreign impersonators.

FILE PHOTO: Worker carries fresh Parmesan wheel off storehouse shelf at 4 Madonne Caseificio dell'Emilia dairy cooperative in Modena, Italy, February 16, 2016. REUTERS/Alessandro Bianchi/File Photo

On supermarket shelves worldwide, a star-shaped logo would mark out real Italian cheeses, hams, pasta and sparkling wines from those that only look or sound Italian, such as Parmesan made in New Zealand or Prosecco bottled in Brazil.

But Rome has discovered that even the simplest recipe can go wrong. Instead of unifying Italy’s food industry against a common enemy that is bagging billions of euros in sales, the government’s proposal for a Made in Italy certification quickly created bitter divisions.

A row has erupted over what it means to be truly Italian - should every single raw ingredient be made in Italy, for example - and now the project could be ditched altogether for lack of an industry consensus, according to two industry ministry sources who declined to be named as talks with food firms are ongoing.

“For now there is no final decision on whether to go ahead with the Made in Italy sign, we are studying it, we are doing technical checks,” said one of the sources, an industry ministry official who is working on the project.

“We will launch it only if it fully meets the requests of producers,” he said, adding that the food industry was split into several groups with conflicting views on the project.

The ministry announced the project at the end of last year, and began consultations with food producers in March, in response to industry complaints that foreign-made foods masquerading as Italian produce were costing the country billions of euros in lost export sales.

A logo guaranteeing Italian origin would enable exporters to grab some of the roughly 60 billion euros ($67 billion) in annual global sales generated by foreign imitations, according to Italy’s food producers’ lobby, Federalimentare.

Marketing experts agree. Brand Finance, a global consultancy that compiles an index of the world’s most valuable brands, estimates it could add up to 5 percent to the enterprise value of small and medium-sized Italian food companies.

“Domestic companies would surely gain from such a logo given that Italy has a high reputation in the food sector and many of them are not well known outside the country,” said Massimo Pizzo, Italy managing director for Brand Finance.

However, Federalimentare’s members could not agree on a definition of Italian-made. Some took a hard line, insisting products be made entirely in Italy from ingredients sourced at home, while others argued for a less stringent approach.

‘IF WE OPEN THE DOOR..’

The consortium of producers of Parmigiano Reggiano, the king of Italian cheeses, insists on rigid standards for everyone.

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“If we open the door to products with foreign ingredients, we are not talking of real Made in Italy ... this is not the kind of help we are looking for,” said Riccardo Deserti, chairman of the consortium.

Under the consortium’s rules, recognised across the European Union, cheese can only be marketed as Parmigiano Reggiano, or by its English name Parmesan, if it is made according to a precise method within a restricted area around the town of Parma.

The consortium of Prosecco wine producers takes a similar stance, rejecting the idea of being put in the same authenticity category as products made with foreign raw materials.

On the other hand, some firms believe traditional Italian production methods should be enough to qualify for the logo.

Barilla, the world’s biggest pasta maker, wants to carry the Made in Italy logo though 16 of its 30 plants are abroad, including in the United States and Russia.

“We are Italian, we pay taxes in Italy and we run our foreign plants following the rules of the Italian quality,” Paolo Barilla, vice chairman of the family-owned business, told a food conference in March. A Barilla spokesman declined to make any further comment for this story.

One of Italy’s most identifiable food brands, the high-end food chain Eataly, draws a finer line on the issue.

It recently opened its first store in Moscow where an embargo on some European food imports forced it to make some cheeses from local ingredients. It sells mozzarella and burrata made in Russia, but not Parmigiano.

“I totally agree with the idea of a Made in Italy sign,” Eataly founder Oscar Farinetti told Reuters at the inauguration of the store, but did not say whether he sided with the Italian-made purists or the likes of Barilla.

OLIVE AND OAK

Italian food producers can at least agree on one thing: that foreign rivals are competing unfairly by marketing distinctly Italian products, using words and symbols that suggest an Italian origin but listing the real provenance in fine print.

They point the finger at goods such as New Zealand dairy giant Fonterra's FCG.NZ Perfect Italiano range of Parmesan and Mozzarella cheeses or Garibaldi Prosecco made in Brazil by the Garibaldi Winery Cooperative.

Contacted by Reuters, a Fonterra spokesperson said the group markets the two cheeses using their Italian names and featuring the Italian flag because they were launched by Natale Italiano, an Italian who migrated to Australia in the 1920s.

“While the brand is proud of its heritage, its packaging is evolving away from featuring the Italian flag,” Fonterra said.

The group did not disclose the turnover of the Perfect Italiano products.

Garibaldi Winery did not respond to emailed requests for comment.

The Rome government had proposed a Made in Italy logo employing the symbols of the Italian republic: a star framed by olive and oak branches.

The project was, however, constrained by EU rules.

The government planned to include products if their last “significant transformation” happened in Italy, the ministry official said - meaning, for example, sausages produced in Italy using imported meat would qualify for the label while ham made in a foreign plant of an Italian producer would not.

This would bring the logo into line with the European Customs Code governing country-of-origin labeling, but the plan satisfied neither side in the food fight; the purists balked at the idea of foreign ingredients being allowed, while other firms argued the rules were too stringent.

Hence the impasse that threatens the project.

“Even if we wanted to, we couldn’t use a different standard from the one used in Europe,” said the source.