Pizza makers want a deal on cheese

Wednesday, November 28, 2012

by SUSAN MANN

Canada’s restaurant association is once again requesting the Canadian Dairy Commission lower dairy prices to a more competitive level, while Dairy Farmers of Canada didn’t offer any recommendations on pricing.

The two groups, along with other stakeholders, met separately with the commission last week as part of consultations it holds in advance of setting annual support prices for butter and skim milk powder. The Commission usually announces the prices in mid December and changes are effective the following Feb. 1. Provincial milk marketing boards use the support prices as a reference to establish prices for industrial milk, used to make cheese, butter, ice cream and yogurt.

The Canadian Restaurant and Foodservices Association has made the same request for more competitively-price dairy products for the past several years. It’s again asking for the industry to introduce a special class of cheese pricing for the restaurant industry that, it says, is similar to what other sectors have. In a Nov. 20 letter to the Commission, association president and CEO Garth Whyte says introducing a new class of cheese pricing will level the playing field that forces fresh pizza makers to pay 30 per cent more for mozzarella cheese than frozen pizza manufacturers.

Dairy Farmers of Canada told the Commission farmers have seen increased feed costs this past year says spokesperson Therese Beaulieu, “but we left it at that.”

Whyte says the association has wanted special class cheese pricing for fresh pizza makers for a long time “because we see more market share diminish and we see more and more frozen pizza” eat into the fresh pizza market.

During the past five years, overall restaurant orders have increased by six per cent but pizza orders have decreased “by a stark 12 per cent,” Whyte says in the letter.

The association told the Commission its members want to sell more dairy products, he says. “Help us do that. That was our pitch.”

Whyte says this time around their request to the Commission was specifically for the special class pricing for fresh pizza cheese and to modernize supply management “not destroy it. We’re saying ‘work with us. We want to work with you.’”

In his letter, Whyte also notes dairy farmers are now more efficient than they were in the past yet those efficiencies aren’t being passed on to consumers. This year the cost of production fell by 0.17 per cent, which “further justifies lowering dairy prices for Canadian consumers.”

Commission spokesperson Chantal Paul says the special classes are part of the dairy industry’s special milk class permit program. Decisions about the program are made by an industry committee called the Canadian Milk Supply Management Committee (CMSMC). It’s made up of representatives from all the provincial milk boards and governments. The Commission manages the operations of the program on behalf of industry and chairs the CMSMC.

“But we really can’t make that decision to create a class just for the restaurant people,” she explains. “It has to go to the CMSMC.”

The Commission says on its website the special milk class permit program sets the price of milk according to its end use to allow processors and further processors to remain competitive.

The CMSMC turned down the restaurant association’s request for special class pricing for fresh cheese for restaurants in 1999. The association took matter to federal court in November that year and requested a judicial review of the CMSMC decision. But the court ruled in February 2001 it didn’t have jurisdiction to review a CMSMC decision because the committee is not a federal board, commission or other tribunal as defined in the Federal Court Act.

Beaulieu says the dairy industry hasn’t had any discussions recently on special class pricing for cheese for the restaurant industry.  

Canada’s restaurant industry buys $2.5 billion a year of Canadian dairy products, Whyte says in his letter. BF