Dairy farmers, restaurants strike a deal on mozzarella dispute

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The restaurant sector was offering rare words of praise for the dairy industry following an announcement of a new milk class for mozzarella cheese to be used on fresh pizzas.

“This new restaurant mozzarella cheese class responds to long-standing concerns raised by CRFA on behalf of our members and fresh pizza makers across the country,” said Garth Whyte, president and CEO of the Canadian Restaurant and Foodservices Association. “We congratulate the dairy industry for making this important announcement.”

The deal will cut the price for Canadian mozzarella by five to 10 per cent for restaurants, which have been sharp critics of supply management. Frozen pizza makers already have access to lower-priced mozzarella.

It’s hoped the change will boost pizza sales and thereby also increase sales for Canadian mozzarella, said Wally Smith, president of the Dairy Farmers of Canada.

“It is the farmers’ sincerest hope that this class will bring growth in sales of cheese in the restaurant pizza category,” said Smith.

The new deal, a 15-month trial which takes effect June 1, was praised by Agriculture Minister Gerry Ritz.

“This is a good example of how greater collaboration between the whole value chain can help grow markets for our farmers while keeping Canada’s restaurant industry competitive,” said Ritz.

The Canadian Restaurant and Foodservices Association said it has been pushing for a price break “for more than 10 years” and the deal will put it on even footing with frozen pizza makers.

However, food processors said the new milk class doesn’t address their concerns.

“Boston Pizza doesn’t compete with pizzas from Boston but we do,” said Chris Kyte, president of Food Processors of Canada.

“We need a level playing field with our American competitors, we need leadership to address the fundamental competitiveness issues facing the industry. Let’s begin with the first problem: competitively priced inputs.”

An Agriculture Canada study showed Canadian companies pay 30 per cent more for dairy products than their American competitors. But the Dairy Farmers of Canada and other supply management advocates say that’s only because American dairy farmers can sell below their cost of production thanks to generous subsidies from Washington.

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