Better to have part of the cake than no cake, at all

A recent decision by the Canadian Dairy Commission (CDC) to create a new classification for mozzarella cheese might open the way

A recent decision by the Canadian Dairy Commission (CDC) to create a new classification for mozzarella cheese might open the way to further loosen iron-clad tariffs against specialty cheese imports.

The CDC decision creates a new class and price structure for mozzarella used by fresh pizza-makers. The idea is that this will see lower prices for restaurants and see the market for this cheese expand to the benefit of everyone, including dairy producers — at least that’s the hope.

There is more to the story, of course.

The CDC decision is supported by the Canadian Restaurant and Foodservices Association (CRFA). That’s important because this group has for many years been waging a holy war against dairy supply management (SM) as the root of all evil.

Their interests were purely mercenary, of course. They wanted lower cheese prices for their members and cited cheaper prices in the cheese market in the U.S., which wasn’t controlled by SM. The relentless CRFA lobby against SM over the years has become uncomfortable for the dairy industry, particularly as SM has come under scrutiny in connection to trade agreement discussions.

Rumours of the feds giving up SM at the negotiating table continue to circulate and damaging price allegations by SM foes like CRFA don’t help the dairy industry’s position. It would seem that political realities might have caused the Dairy Farmers of Canada (DFC) to moderate their rigid SM position.

What this decision seems to have done is caused the CFRA to pull back its vociferous anti-SM lobby and made the DFC look more reasonable — a political perception they surely needed.

The DFC should continue this type of approach by softening its high tariffs position on imports of specialty cheeses in general. It would serve them well with public opinion and in the media arena, and with politicians of every stripe that are not friends of SM.

High tariffs are generally used to keep out imported products that can displace the same, but more expensive, domestically produced products. But that’s gone awry with cheese imports and it annoys the cheese-consuming public and media.

The fact is specialty cheeses produced in specific regions in the world cannot be reproduced identically in Canada. Yes, they can come very close — but the subtle nature of yeasts and enzymes are very site specific and affect cheese flavour and texture. That’s why specialty cheeses are sold by brand names in many cases.

Of course, there’s no guarantee that this potential price reduction for commercial mozzarella cheese will see a lower price for pizzas in restaurants.

In fact, most expect that if there’s an adjustment, it will be minor at best and be used only for special sales or features. The reality is that retailers and restaurateurs only reduce prices for competitive reasons. They will probably surmise that most consumers will not be aware that cheese prices will have been reduced and they should expect lower pizza prices. Consumers, in most cases, are just happy that prices have not gone up and really don’t expect lower prices, having been accustomed to inflation a long time ago.

Spokespeople for the DFC are trying to rationalize this price reduction with the usual “demand will increase” song and dance and everyone will benefit. There is no indication that will actually occur, unless you reduce pizza costs by say 50 per cent.

I would suggest that most folks don’t go out for a pizza just because it’s suddenly a dollar cheaper. This price reduction is going to come out of the pockets of dairy producers, and I would suggest it’s wishful thinking that cost will ever be returned.

Instead, I would suggest that the anticipated $27-million loss to producers is the political price to get the CFRA off the their anti-supply management lobby. Perhaps that will be worth the price to producers.

I would also suggest that dairy producers would do well to further derail the political and media onslaught against SM by taking a proactive approach to mitigating tariffs on specialty cheese imports. It would be one less hammer opponents have in attacking supply management. The mozzarella decision is a good start, but the process needs to continue. As the saying goes … better to have part of the c cake than no cake, at all.

— Ahead of the Heard

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