Marketing commission changes dairy content rules for butter substitutes

Thursday, February 3, 2011

by SUSAN MANN

A Dairy Farmers of Ontario spokesman questions whether eliminating the minimum amount of butterfat in butter substitute spreads sold in the province will help increase demand for the products.

Peter Gould, Dairy Farmers general manager, says there aren’t significant amounts of butterfat/vegetable oil spreads sold in any Canadian province. There are some blended products available in Ontario “but they are not a big share of the market. If you can put more vegetable oil in a blend is that going to result in a substantial market? My sense is it won’t but you really can’t tell until we have some experience.”

The provincial government approved and filed Milk Act regulation changes that eliminate the requirement that there be at least 50 per cent butterfat in butter substitutes on Jan. 24, just a week ahead of a deadline set by the Canadian Agreement on Internal Trade panel.

The Farm Products Marketing Commission made the changes.

Gould says the previous rule ensured there was a meaningful amount of dairy in the butter substitutes for consumers. “Also from a labeling point of view you can call that a butter blend.”

Now that there is no minimum amount of butterfat required, manufactures can produce blends with just 10 per cent butterfat and still call them butter blends, he says.

Even though there isn’t a minimum amount of butterfat required to be in blended spreads, Gould says he assumes there has to be at least one per cent butterfat.

In October, an Agreement on Internal Trade panel issued a report saying Ontario measures affecting dairy blends, contained in provincial Milk Act regulations 753 and 761, were inconsistent with the province’s inter-provincial commitments and weren’t allowed under the agreement.

Ontario’s rules on dairy blends were challenged by Alberta on behalf of a margarine manufacturer. The panel gave Ontario until Feb. 1 to comply.

Geri Kamenz, the commission’s chair, says it started working on the changes as soon as the ruling was handed down.

In a written directive to the commission, Ontario Agriculture Minister Carol Mitchell warns that if the province didn’t respond satisfactorily or meet the deadline, Alberta could launch a complaint through the Agreement on Internal Trade panel. “Compensatory damages might be awarded against Ontario if full compliance has not been achieved,” she wrote.

In its 2010 annual report, Dairy Farmers stated the panel’s decision “reinforces serious concerns about the lack of clarity in the intent and functioning of the AIT (Agreement on Internal Trade) and especially about the lack of a sufficient review mechanism or recourse to the courts to address potential errors of law of fact.”

Dairy Farmers adds in its report the “driving force behind Alberta’s AIT challenge is a corporate agenda to undermine, or completely remove, consumer product standards with a view to increasing manufacturing profit margins.”

Kamenz says the commission consulted Dairy Farmers, the Ontario Dairy Council, which represents dairy processors, and Grain Farmers of Ontario. “The affected stakeholder groups will continue to explore the broader implications and maybe come back with some longer term strategies for the dairy industry,” he says.

Barry Senft, CEO of Grain Farmers of Ontario, couldn’t be reached for comment.

The Agreement on Internal Trade came into effect in 1995. It was established to reduce and eliminate barriers to the inter-provincial movement of goods and services, labour and investment. BF