Canadian pizzerias burned by high dairy prices

March 24, 2002

TORONTO -- Canada's restaurant industry is urging dairy producers to resist raising dairy prices in 2002. Over the last seven years, dairy prices have increased by 24 percent, nearly twice the rate of inflation.

According to the Canadian Restaurant and Foodservices Association (CRFA), pizza restaurants buy most of the mozzarella made in Canada, and have been hurt worst by the increases. CRFA estimates that, since 1994, price increases have cost the restaurant industry almost $300 million (Canadian).

"Restaurant operators are tired of being burned by rising cheese prices," said Stephanie Jones, vice president of food supply for CRFA. "The cost of producing milk has fallen ... but none of the savings have been passed on to restaurateurs."

Following a meeting with the Canadian Dairy Commission (CDC) in early December, Jones said restaurant operators can't increase prices because customers won't accept them. A release from CRFA stated that menu prices in Canadian quick-service restaurants, such as pizzerias, have increased only 1.4 percent so far in 2001.

"We're one of the dairy industry's largest customers, and we want to grow the market for Canadian dairy products," Jones said. "But constant increases in prices are a huge roadblock that's actually limiting the consumption of dairy products in Canada."

Pizza operators also face stiff competition from high-quality frozen pizza products, which are made from lower-priced Canadian cheese or imported tariff-free from the U.S.

The CDC is expected to announce 2002 dairy prices on Dec. 14.

CRFA is Canada's largest hospitality association with 15,900 members representing 47,500 foodservice outlets.

Topics: Cheese

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