Your cheese costs are about to go down, and this is not a prank from a miserly writer after a long winter.
Your cheese costs are about to go down, and this is not a prank from a miserly writer after a long winter. I am buoyant as a sailboat in spring about this most excellent news. After well over a decade of lobbying, the Canadian Restaurant and Foodservices Association (CRFA) finally nudged the Canadian Dairy Commission (CDC) to make a move on the unfair disparity in price between fresh and frozen pizza retailers. The CDC created a new milk classification for mozzarella cheese headed for fresh pizzas, which means operators will now save about five to 10 per cent on their mozzarella costs depending on cheese composition and volume discounts, shared the CRFA. There will be an application process to access the new 3(d) classification, and hopefully the system runs in a smooth and timely manner. While there is still work to be done, this is still something to pop a cork about.
The news comes on the heels of a rather intriguing case of cheese classification debate at Canadian International Trade Tribunal (CITT) that’s been gurgling up from a secretive surface and finally spilling over in the recent Globe and Mail article “Cheese battle a big threat to Canada’s cloistered dairy market” by Barrie McKenna.
McKenna reported that the case started with Pizza Pizza figuring out how to buy imported, less expensive American product through prepackaged pepperoni and mozzarella kits that came in duty free as “food preparation” rather than facing the 245.5 per cent tariff on cheese.
This is understandably upsetting to independents who have been affected by pizza price wars, unable to figure out how some players are selling their pies for such a low price. Well, one cat is out of the bag.
Being outraged at perceived or actual injustice is natural (I phrase it this way only because, in a case like this, the sense of justice often depends on who you are in the story). However, consider this: the timing of the news from the CDC is interesting and this isn’t the first case of a pizza company trying to get around exorbitant food costs. Let’s not forget last year’s large-scale cheese smuggling ring operating via the Niagara border crossing. When things are priced past what the market can reasonably bear, loopholes and illegalities will occur. Change is forced when the weaknesses of a system are exposed. It is a little wild that we’re not talking about illegal drugs, weapons or tobacco here. Cheese is not inherently illegal and if people are willing to get this creative about how they are obtaining it, the CDC must rectify itself or choose to compete with the cracks in the system. In this case, it has taken a step towards a remedy.
The protected dairy industry in Canada comes under enough fire that I need not add to it here. Protectionism is unfavourable to most economists: bad for innovation, and most importantly, consumers. It seems other players on the world stage tend to have some industry they seek to protect. America protects its farmers with multi-billion dollar subsidies, Japan has a history of protectionist policies over its rice industry, and Canada…well, Canada puts a fence up around its milk and poultry. I guess the question left is, does the dairy industry need protectionism or subsidies to survive? Are they the only options? Would our milk thrive on a free market? I don’t know, but I imagine there are people who can put strong arguments forward for both sides. Transparency and fairness in pricing is a minimal request under the circumstances, whether it’s domestic or foreign trade.
Changes are in the wind for Canada’s dairy industry, and that is a good thing. While you can’t change the road travelled, you can reap the benefits of this positive change.
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