Inside a Cheese Vault

November 24, 2016

September 2 1666, Samuel Pepys witnesses the great fire of London from his home. In fear for his houses safety, he decides to take drastic action and save his most prized and valuable possession. Carrying his prized and extremely expensive wheels of parmesan cheese out to the garden and burying them for safe keeping. 


It seems that there is still huge demand for keeping expensive cheese safely stored under lock and key.  Above is the inside of a vault at an Italian bank called Credito Emiliano, or Credem for short. The vault, like most other bank vaults, has high-end security — cameras, digital electronic doors, around the clock security, all the bells and whistles. This one, though, pays particular attention to the vault’s temperature and humidity as well, much like a giant cigar humidor. That’s because the items on the shelves of that vault aren’t cash, gold, precious stones or even rare artworks — they’re 36kg wheels of cheese. Parmesan, specifically.



If you’re a manufacturer of Parmesan , there’s a good chance you have a cash flow problem. In the short term, you need to cover your overheads, but you don’t end up with a profitable product right away. Much like producing aged whisky, you have years of lead-time before it's ready for sale. As a good quality cheese requires at least 18 months and ideally, up to 36 months to age to maturity. Producers basically have working capital tied up in stock for two years. They could shorten the maturation to cut down on costs, but then the cheese that we eat would not be of high quality.



Enter Credem. Since 1953, the bank has been offering a cheese-secured loan to Parmesan producers. The terms are pretty simple. The bank gives the cheesemakers a loan equal to 60-80% of the cheese’s value at a reasonable interest rate (about 3% as of 2009). As collateral, the cheesemakers store their cheese in Credem’s special vault/humidor. If the Parmesan owner defaults on the loan, Credem keeps the cheese and sells it when it’s ready. The system is very much like a cheese-based, pawn shop. While sitting in Credem’s vault, the value of the collateral keeps appreciating. Ultimately, these 36kg (80-Lbs) cheese wheels have a wholesale price of about 300 Euro (about £320 dollars), as of 2009, per NBC News. The loan is a rather low risk win for all involved.




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