News

Canadian restaurateurs stage pizza box protest over dairy prices

December 9, 2004

OTTAWA, Ontario — Canadian restaurateurs who are sick of rising dairy prices made a special delivery to decision-makers in Ottawa on Dec. 9 — dozens of pizza boxes packed with 3,600 protest cards.

According to a news release, the Canadian Restaurant and Foodservices Association hopes the effort will lead to a freeze on dairy prices, which are among the highest in the world according to international studies. The same protest cards have been sent directly to the Minister of Agriculture and Agri-food.

The Canadian Dairy Council believes a significant increase in dairy prices is necessary to offset BSE-related losses shouldered by dairy producers. (The country's new milk price will be announced on Dec. 15.) But BSE compensation is outside the mandate of the CDC, and federal and provincial governments already have a process in place to determine appropriate levels of BSE compensation for beef and dairy farmers.

"If the CDC duplicates these efforts, it will amount to double-dipping at the expense of Canadian taxpayers," said Stephanie Jones, CRFA vice president of food supply. "Farmers deserve compensation for severe losses due to BSE, but not in the form of a permanent price increase."

CRFA is also calling on the federal Minister of Agriculture and Agri-food to make the CDC more accountable to Canadian taxpayers. In the last 10 years, Canadian dairy prices rose by 38 percent, while the cost of milk production fell by 5 percent, according to CDC figures.

"Under Canada's supply management system, dairy prices should rise and fall with the cost of production. But that never happens and the CDC continues to act without oversight and artificially inflate Canadian dairy prices," Jones said. "This is hardly a recipe for long-term success. No matter what business you're in, it simply doesn't make sense to milk your best customers and drive down demand for your products.

Studies from the International Dairy Federation, the Organisation for Economic Cooperation and Development, and the federal Ministry of Agriculture, clearly show that Canadian dairy prices are well above world prices.

"The OECD report indicates that consumers subsidize the dairy industry by $2 billion a year -- the equivalent of a $178 tax on the average Canadian household," Jones said.

Canadian Dairy Price Facts

* In 2004, the foodservice industry purchased more than $2 billion in dairy products.

* Between 1994 and 2004, rising dairy prices have cost the industry more than $653 million.

* A 10 percent increase in dairy prices will cost the restaurant industry $216 million every year.

* The average restaurant operates on a 4.6 percent profit margin, which equates to 9.4 cents on a $2.00 glass of milk.

* Dairy prices have increased by 38.2 percent since 1994, while the cost of dairy production has decreased by 5.1%.

* To protect Canada's high dairy prices, import tariffs of up to 300 percent block U.S. dairy products from coming into Canada.

* Canadian restaurant operators must pay 30 percent more than their closest competitors, frozen pizza makers, for domestic cheese.