Building Block Associates

  • Home
  • Products & Solutions
    • View Supplies
    • What's In Season
    • Manage Mie Foodservice Manager
    • Foodservice Webinars
    • Become A Member
  • Online Store
  • Social Chat Blog
    • Foodservices News
  • Contact Us
  • Careers
  • Home
  • Products & Solutions
    • View Supplies
    • What's In Season
    • Manage Mie Foodservice Manager
    • Foodservice Webinars
    • Become A Member
  • Online Store
  • Social Chat Blog
    • Foodservices News
  • Contact Us
  • Careers

Industrial milk price hike likely to be passed down to consumers at restaurants

8/31/2016

0 Comments

 
Picture
The Canadian Dairy Commission decided to boost the price of industrial milk — which is processed into yogurt, ice cream, cheese and butter. Image: Thrillist
TORONTO – Restaurateurs are crying foul over a second industrial milk price increase this year, set to take effect Thursday, which they say will likely lead to higher food prices for Canadians.

Also read,
America's Mountain Of Cheese!

In July, the Canadian Dairy Commission decided to boost the price of industrial milk — which is processed into yogurt, ice cream, cheese and butter — by 2.76 per cent. That’s on top of a 2.2 per cent hike that occurred in February.

The dual increase, the first in a single year since 2008, was introduced because of a “very unique and unexpected situation,” said Benoit Basillais, CDC’s chief of policy and economics, in an email.

Basillais said the hikes came because producer revenues “decreased rapidly” last fall, in part due to a decrease in global demand from importing countries and changing consumer preferences — and did not stabilize by early spring as anticipated.

The increase will alleviate producers’ financial stress and ensure the fall’s high demand for dairy products is met, he noted.

Basillais added the move was intended to be an advance of the CDC’s December price decision for 2017, though he said it’s “premature” to say there will be no increase next year.

While the dual price hike may provide a reprieve for producers, it’s likely to put the burden on restaurateurs, who must decide whether their clients can stomach higher prices for dining out.

Bill Pratt owns eight restaurants and four food trucks in Halifax and Dartmouth, N.S., under the banner Chef Inspired Group of Restaurants. Their menus boast gourmet burgers, poutine, burritos, tacos and quesadillas — all topped with cheese.

“We’re a heavy cheese user,” Pratt said, adding the price increase is “very difficult for us.” Pratt’s already increased prices once this year and doesn’t think his customers will take kindly to another one so soon.

He said he’ll likely have to absorb the cost increase, which could be difficult considering restaurant profit margins are low in Canada. In 2012, the operating profit margin for food services and drinking places was 4.2 per cent, according to Statistics Canada.

“I’m the guy down here that’s kind of struggling to make a buck in a very tough market,” Pratt said. It seems likely diners will end up paying more, according to Pierre Cadieux, vice-president of federal and Quebec government relations for Restaurants Canada, a not-for-profit association representing 30,000 businesses in the restaurant and food-service industry.

“That (price hike) has to be passed on to the consumer somehow,” he said. “So, it’s reflected in our menu prices. It’s reflected in changes to the menu.”

The cost of items using these ingredients at restaurants may increase, Cadieux suggested, or restaurateurs may instead remove some menu items that require a lot of the higher-cost ingredients.

Milkshakes, he said, are the perfect example of an item disappearing from Canadian food outlets as few consumers are willing to pay the price shops must charge for the diner staple.

Basillais noted the difference consumers will see in prices for goods using industrial milk is difficult to anticipate because it depends on how much of the final good is made up of the dairy component. Other factors, like transportation, packaging and processing costs, also need to be accounted for, he said.

But, he added, price hikes experienced by consumers won’t be more than 2.76 per cent. The CDC is part of Canada’s supply management system for the dairy industry, which is meant to ensure supply meets demand and to reduce price volatility, said Basillais.

Restaurants Canada has long championed changing the supply management system. “We have to reinvent that part of our agricultural system,” said Cadieux. Though, he added, it’s not on anybody’s political agenda at the moment.

The poorest 20 per cent of Canadian households pay an extra $339 annually for dairy and poultry due to supply management, a report from the Montreal Economic Institute released Wednesday found.

That premium pushes more than 100,000 Canadians below the poverty line, according to the study.

“A reform plan that would phase out production quotas and import duties would benefit all Canadian consumers,” the authors write, “but it would especially benefit poorer individuals, raising their living standards and effectively lifting many of them out of poverty.”

This management system does mean consumers pay higher prices, said Jim Fisher, a professor at the University of Toronto’s Rotman School of Management.

But, he added, it also helps protect Canadians from an insufficient supply of products, even if they pay a touch more for them.

“So we can all sleep well in our beds tonight knowing that … there will always be a supply for us.”

Source Aleksandra Sagan, The Canadian Press

0 Comments



Leave a Reply.

    Go to blog
    Advertisement

    RSS Feed

    News & Updates

    Stay informed with the latest news around foodservice, agriculture and other related food news.

    Do you Enjoy our E-news & Updates?
    Get our foodservice E-news, blogs and LTO's sent to your inbox, SUBSCRIBE HERE.

    Advertisement Opportunities 
    To get your foodservice business in our daily e-news, here.

    Archives

    March 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015

    Categories

    All
    Agriculture And Food Safety
    All Day Breakfast Menu
    Beans Benefits
    Beverage Company
    Building Construction
    Candy Company
    Carbonated Drinks
    Chicken Farm
    Dairy Production
    Fast Food
    Fast Food Chains
    Food Prices
    Generation Z
    Genetically Modified Organisms
    Gluten Free
    Grocery Retailer
    Healthy Meals For Kids
    Imported Foods
    Imported Foods From Other Countries
    Liquor Licence
    Milk Industry
    Milliennials
    National Food Holidays
    Nut Allergies
    Organic & Natural
    Processed Foods
    Produce Industry
    Restaurant
    Restaurant Management
    Restaurant Ordering System
    Restaurateurs
    Seafood
    Sustainable Resources
    Sweet Snacks
    Sweet Tasting Desserts
    Tree Nuts
    Value Menu Offering
    Ways To Reduce Food Waste

    Picture
    Advertisement
    Picture
Powered by Create your own unique website with customizable templates.