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Dairy processors cheesed off at new regulations

“There are other ways to support dairy producers’ incomes in Canada than to destabilize all of the industry.”

– Yvan Loubier

Canada’s largest dairy processors have gone to court to block new federal cheese regulations from taking effect later this year.

Kraft Canada, Parmalat Canada and Saputo last week asked the Federal Court of Canada to declare the regulations illegal.

The regulations, scheduled to come into effect December 14, cover standards for cheese making in Canada. They require processors to use more whole milk and less so-called modified milk, or milk solids, in manufacturing cheese.

The three companies say the new rules will increase their costs and raise the price of cheese to consumers.

In court documents filed October 20 in Ottawa, the companies argue the regulations exceed the federal government’s authority and are unenforceable.

The only people who will benefit are dairy farmers, who can expect an extra $185 million a year from higher milk sales, the plaintiffs say.

But those benefits will be short lived because cheese prices will rise, consumers will buy less and farmers’ revenues will ultimately fall, according to the companies.

The federal Conservative government earlier this year asked the Canadian Food Inspection Agency for new “compositional standards” to ensure cheese is made from milk and not so-called modified milk components.

Kraft, Parmalat and Saputo argue regulating cheese content is a provincial, not a federal, matter because it involves “economic transfer” and production.

They also maintain CFIA inspectors cannot determine how much of which ingredients are in cheese, making it impossible to enforce the regulations.

Yvan Loubier, a spokesperson for the coalition, said forcing cheese makers to use higher-priced milk instead of lower-cost dairy ingredients will increase industry costs by over $71 million annually. This will result in a 10 to 15 per cent increase in the retail price of cheese, he said.

The Dairy Processors Association of Canada estimates cheese manufacturers will lose $165 million a year in sales as a result.

Loubier said the only intent of the regulations is to increase revenue for dairy farmers.

“There are other ways to support dairy producers’ incomes in Canada than to destabilize all of the industry,” he said in an interview from Quebec City.

Dairy farmers support the regulations. A Dairy Farmers of Canada spokesperson said last week the group’s application is for a judicial review and the federal government has 10 days to acknowledge it.

“At this point, it is too early for DFC to say anything, as we still need to assess the situation,” the spokesperson said. [email protected]

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