Tribunal gives go-ahead to Millbank dairy plant

Tuesday, February 14, 2012

by SUSAN MANN

Even though a yogurt drink common in Asia and the Middle East is already being manufactured in Ontario there’s room for another player, the Ontario Agriculture, Food and Rural Affairs Appeal Tribunal has ruled.

In a decision handed down Feb. 9, the Tribunal dismissed an appeal by the Ontario Dairy Council. The organization, representing the province’s processors, objected to the director of the provincial agriculture ministry’s food inspection branch granting Esskay Dairy Ltd. a permit to alter an existing building to set up its plant.

Narendra Kanai, who co-owns Esskay with Azad Damani, says they’re very excited to finally be setting up the plant. They’ll be installing new and used equipment in a facility in Millbank that used to house a dairy processing plant. 

They plan to use milk from cows, goats and sheep to make the ethnic yogurt drink called lassi. Kanai says they’ll be using milk from the local area around Kitchener-Waterloo and selling the product across Canada. In testimony to the Tribunal, he said 15-20 local people would be hired to work at the plant.

Tom Kane, council president, says by email there’s no further room for appeal. “The (Ontario agriculture) minister can review the decision but that is all.”

In the Tribunal’s written decision, Kane says lassi is already produced by at least three small family-owned companies in Toronto and the competition resulting from Esskay’s application may cost jobs at those companies.

In addition, Kane said there would be less milk available for existing dairy processors to manufacture cheese and butter.

Kane countered the evidence contained a letter from the director granting the permit. The director said the cow’s milk Esskay is requesting is available on demand in Ontario for any yogurt processor. Kane says that was true when the director made the decision on Aug. 18, 2011 to grant the permit but as of Nov. 1, industrial milk wasn’t supplied to yogurt processors on demand because Dairy Farmers of Ontario implemented a new allocation system for yogurt plants. Kane says because of an increasing demand for industrial milk by yogurt processors, the new allocation system was put in place to protect milk supplies for existing cheese and butter plants.

Kane didn’t think Esskay would have been able to obtain a supply of milk under the new allocation system, the written decision says.

The Tribunal found that while there may be some negative impacts on the existing facilities, the proposed plant would likely benefit producers. And even though there are other lassi products on the market in Ontario, Esskay’s drink has the potential to expand the overall lassi market by providing a “new formulation that may offer new and different flavours, textures and other sensory qualities,” the written decision says. In addition, there is some limited potential for Esskay’s lassi to displace imports.

The Tribunal also found that the negative impacts on existing processors are likely to be small because the milk Esskay is requesting is small – 400,000 litres of cow’s milk or about 0.03 per cent of the 1.3 billion litres of industrial milk processed annually.

Dairy Farmers of Ontario supported Esskay application but didn’t attend the Tribunal hearing. BF