by SUSAN MANN
American mozzarella cheese coming into Canada as part of pizza kits for fresh pizza manufacturers is allowed to enter duty free - and that’s taking a bite out of domestic sales, say Canadian dairy industry officials.
Dairy Farmers of Ontario alerted delegates of the situation during the organization’s fall regional meetings held across the province Oct. 9 to 12 and Oct. 18.
Therese Beaulieu, Dairy Farmers of Canada spokesperson, says they became aware last fall that mozzarella cheese in pizza kits was entering Canada from the United States. But they don’t know when the kits started coming in. The kits contain 80 per cent mozzarella along with 20 per cent pepperoni and are coming in to all parts of Canada.
Beaulieu says the kits are big brown boxes that have plastic containers of cheese and pepperoni.
The Canada Border Services Agency decided to classify the kits as a food blend allowing the cheese in them to enter duty free. Ordinarily, the tariff for mozzarella cheese is 245.5 per cent. That’s the percentage applied to imports above levels that can come in duty free each year.
Canada Border Services, which manages the access of people and goods to and from Canada, couldn’t be reached for comment.
DFO says in its report to fall regional meeting delegates that the Border Services decision “is already having a negative impact on domestic mozzarella sales and could have an even greater impact going forward in the absence of an industry program and/or government action.”
DFC’s preliminary estimate of the cheese coming in as part of the pizza kits is 2,000 tonnes to 4,000 tonnes annually. DFO’s document says the total fresh pizza cheese market is estimated to be about 35,000 tonnes annually.
Don Jarvis, president of Dairy Processors Association of Canada, which represents Canadian processors, says “we’d rather see domestically made mozzarella being used by the customers.” He says those customers are fresh pizza manufacturers.
The situation is probably occurring because mozzarella cheese is significantly cheaper in the United States than in Canada, he explains.
So far, DFC representatives have talked with government officials from Canada Border Services and other federal departments to get the classification of the kits changed. But those talks were unsuccessful.
“Our position is this product is a cheese product” and it should be classified as a dairy product, Beaulieu says, noting the mozzarella cheese should be classified under the dairy product section (Chapter 4) of Canada Border Services Customs Tariffs – 2012 document so the imported cheese would be subject to a tariff.
In January DFC put in a request to Canada Border Services for an ‘advance ruling.’ Beaulieu says that’s an official request “to look at what tariff line is the correct one.”
The next step is for DFC to take the matter to the Canadian International Trade Tribunal. Beaulieu says the tribunal’s role is “to rule on what is the proper classification.” The earliest the case will be heard is April 2013.
Beaulieu explains other parties can apply to be interveners in the hearing. Jarvis says the association isn’t directly involved in the hearing process. It wouldn’t have any standing since it isn’t affected economically by the situation. But individual cheese manufacturers who have been economically impacted directly “have the opportunity to support the DFC” and provide evidence.
DFC’s national market intelligence committee, made up of staff from that organization plus staff from the provincial marketing boards, is reviewing options that could be used to promote the use of domestic cheese. Beaulieu says the committee is still investigating the promotional options and “it’s not something that I can talk about at this point.” BF
Comments
The proceesera are taking you for 10 percent
My daughter worked for years for one of my relatives who owned two fresh pizza outlets, and ended up managing one of these outlets. The first thing every pizza store employee learns is "always measure the cheese" because since mozzarella cheese is the most-expensive ingredient in pizza, it, just by itself, determines the difference between profit and loss. The second thing every pizza store employee learns is that dairy farmers are the enemy because they force, and want to continue to force, fresh pizza makers to use more-expensive (245.5% more) Canadian mozzarella, while frozen pizza makers can use far-cheaper imported product. Therefore, it's only common sense, and good business, for fresh pizza makers to "do an end run" around the Canadian dairy industry, and the greedy, and self-centred dairy farmers it represents. More power, and good luck, to our fresh pizza industry, and a pox on supply management for always thinking only of themselves. And since I don't think I'm wrong to suggest there are likely more fresh pizza outlets in Canada than dairy farmers, the Canadian government is, by defending dairy farmers at the expense of fresh pizza makers, supporting the "tail", rather than the "dog"
Stephen Thompson, Clinton ON
The problem and reason why internet forums accomplish nothing is because self proclaimed "farm advisors" can spout off useless blabber and make up facts to try and stir the pot. The tariff on cheese is 245.5%, which is not the price difference between Canadian and American products. American products coming in under these special classes are a slap in the face to Canadian consumers expecting Canadian products that adhere to far more strict Canadian quality standards. Here is a real fact, Ontario dairy farmers must maintain a milk SCC (a measure of milk quality)of below 400,000 where the American standard is almost double at 750,000! I too know a pizza franchisee, who proudly states the profit margins on fresh pizzas are higher than any other restaraunt model. Supply management is not perfect and does require some evolution but it is here to stay, no matter how hard you huff and puff.
Derek Van Dieten
Seaforth
Some farmers must really be living under a rock because, time and time again, i hear from supply managed farmers that supply management is here to stay, to those guys, i would say tune into the news once in a while and start talking at your county milk meetings about TPP trade deal and look at all of the single desk systems that have been ended in Ontario in the past decade. Do the math and use a little logic because spouting off all the time that SM is here to stay just makes you look foolish, nothing lasts for ever and you've had you hay day now its time to return reality...
Sean McGivern
PFO
If Canadian mozzarella cheese is so wonderful, and such a good deal for fresh pizza buyers, dairy farmers should have no problem giving consumers a choice about the source of the cheese on their pizzas. Consumers could go to pizza outlets which use imported cheese, or they could go to pizza outlets which use Canadian cheese (if they could find any). Furthermore, I defy anyone to tell the difference between pizza made with imported cheese, and cheese made with domestic cheese, except by price. Dairy farmers huff and puff about how wonderful supply management is, and how it is "here to stay", but they are scared witless of ever giving consumers a choice in the matter, and at the end of the day, that is the ultimate foolishness on the part of dairy farmers.
Stephen Thompson, Clinton ON
Are the Dairy Goat and Sheep under SM ?
Do they not make cheese from those milks also ? YES THEY DO STEPHEN !!
Then I think they have a choice !!
They also might even have a premium product that they could charge more money for their pizza .
I don't think you could tell the difference between frozen mozza and fresh .
Maybe the problem is with the franchise telling them they must use fresh and fresh only .
I'm sorry, but I have absolutely no idea what your point is. Furthermore, I don't think you understand any part of the issue which is that fresh pizza makers are forced to use high-priced domestic cheese, while frozen pizza makers are not. That's exactly why fresh pizza makers, and their suppliers, are trying to make an "end-run" around the system and import a "pizza topping mixture" which contains the cheese they need. In addition, your comment about frozen cheese makes no sense -why would any pizza maker buy frozen cheese? And, again I'm sorry, but why would anyone in their right mind want to use goat and/or sheep cheese on pizza in the first place? The only point is that Canadian dairy farmers are screwing the fresh pizza industry, and this tactic by the pizza industry looks good on our dairy farmers. What is it about dairy farmers getting beaten at their own game, and deservedly-so, that supply managed farmers don't understand?
Stephen Thompson, Clinton ON
Just like always your view or no view .
Too Bad .... I win !!
Yeah it is here to stay,sorry about your luck.Just because you listen to the Capitalists does not mean Supply Management is going away.The government talked about dismantling the Wheat Board for many years before it was altered.Government has not been talking negatively about supply management whatsoever.I think properly guided Supply Management can easily last 100 years.
Now come on, you've got to be kidding ????
Unless you made a mistake or a typo and meant 10years not 100 years.
There isn't hope in this world that supply will even be in place in a decade from now, there is zero support for it outside of monoply farmers them self's.
Lets be realisitic here feather and dairy quota total about 30 billion dollars in Canada all of which is fiction lol, and supply management only benefits a few at the expense of the rest of the farmers.
Sean McGivern
PFO
30 billion in quota value? its more like 60 billion dollars.
so tell me Sean. What will happen to Ontario's financial sheets when 50 billion dollars of quota disappears? What happens when 50 billion of capital loss is claim in a single fiscal period.
Can we say Greece?
60 billion not true. To suggest there is 60 billion in quota capitol is rediculous. Ontario's balance sheets will be fine because it affects so few of the population, to compare it to Greece is just dumb. For example if farmer A bought 30000 units of broiler quota in 1990 he would have paid approximately $17/bird for a total of $510,000. If he sold it at today's value he would get $3,750,000. If quota went to zero tommorrow he would be out $510,000. To suggest he would be out the larger figure is wrong and is what you are doing. The only ones that would be in financial trouble would be the ones who have purchased in the last 6-10 years, although if you are dumb enough to buy quota at values that don't cash flow then so be it. Also if you were able to buy quota at values that don't cash flow then you must have cash flows from other sources and/or equity from other farms otherwise lending institutions would not have lent the money. I have not even factored in allotted "free quota" which must be subtracted from your "60 billion" figure. There is no value lost on allotted quota. If you believed what you say is true you would be a big boy/girl and put your name on it. Raube Beuerman, Dublin, ON
You know maybe I did forget a Zero,who really knows with proper leadership it may be around in 1000 years. The mechanism of supply management should never be lost and if you don't believe that the mechanism is a good one then you are nothing but a disgrace to Ontario's Farm Community,
John Van Dyk
Jonh, its a disgrace that you think a few elite should be protected at the expenses of the rest of the farming community. Its a disgrace that dairy farmers can sell their culls into our beef market and that they can sell their drop calf's or veal calf's into our beef markets,
John when can us beef farmers start selling our surplus milk into your milk markets >?
Sean McGivern
PFO
Government will always support something 100%, right up until the minute they don't - that's the way it works, and it's done that way so the people who are going to be adversely affected don't cause a stampede because they knew about the decision in advance. Of course government is going to claim to support supply management, and they do it because they know farmers are dumb enough, and gullible enough, to believe them. But when gangs start smuggling cheese into Canada for resale, thereby turning supply management into a national disgrace, as well as a national laughing-stock, even the dumbest politician isn't going to support supply management for very long. In addition, Mr. McGivern is definitely not a fearmonger - he's a realist who very-much echoes the sentiments of an entire generation of farmers who have been shut out, and shouted out, by supply managed farmers, and the organizations who pander to them, for far-too-long. And, it speaks volumes about the "smallness" of too many of the people in supply management, as well as amply demonstrates why supply management is not well-liked, and will not be missed, when almost every supply management supporter on this site does little else except launch personal attacks against both Mr. McGivern and myself. If supply management can offer nothing more than empty platitudes and personal attacks against those who dare criticize the quota-based "empire", then even 100 days is too long for supply management to last.
Stephen Thompson, Clinton ON
A 245.5% tariff screws fresh pizza makers because they have to deal with it, while frozen pizza makers don't - double rubbish about quality, if quality had anything to do with anything, frozen pizza makers wouldn't sell pizza one. Get over it supply management is bad, no matter how hard you huff and puff to prove the contrary. If this generation doesn't level the playing field among Canadian farmers, the next generation will, and if it has to take that long, they won't be kind to the people who, like you, dragged their feet.
Stephen Thompson, Clinton ON
You must have been sleeping for you to take that long ( 19 to 25th ) to reply to this story and get on your soap box about cheese .
Dr Oetker I think claims to make his frozen pizza's from Canada made mozzarella .
If the Dr. Oetker company plans to produce frozen pizza using Canadian mozzarella, the most-expensive ingredient in any pizza, and compete with McCain frozen pizza, or any other frozen pizza sold in Canada which can use imported cheese, then the Dr. Oetker company has to be dumber than a sack of hammers. I mean, really, what purchaser of frozen pizza is going to pay more for Dr. Oetker pizza, solely because the cheese on it is Canadian? Even if they retail for the same price, why would Dr. Oetker deliberately pay more than they need for cheese, which when on pizza, tastes exactly the same regardless where it came from. Anyone who wants exclusively Canadian cheese on his/her pizza, and I suggest there isn't anyone anywhere who does, will buy fresh pizza, or make their own. And even if Dr. Oetker claims to use Canadian mozzarella, it doesn't need to be made in Canada for them to be able to make that claim, all they need to do is purchase it from a Canadian importing company and it suddenly becomes "Canadian" cheese. Finally, what is it about a perfectly understandable, and perfectly legitimate, attempt to circumvent a stupid, and punitive, 245.5% tariff barrier that Canadian dairy farmers just don't understand?
Stephen Thompson, Clinton ON
I happened to be somebody who got to "sample" this product before it began to flow. I rejected it. There IS a vast difference in the cheese produced in the USA vs here.
The USA produces some
really fine high end cheeses. Their run of the mill quantity produced cheese does NOT come close to the flavour profile or quality of a lije Canadian cheese.
If it did, I would have embraced this product in a heartbeat. The dairy marketing board protectionism and trusted policies make me want to hurl.
Post new comment