TORONTO/CNW/ – Canada’s restaurant industry is urging dairy producers to hold the line on dairy prices in 2002. Over the last seven years, overheated dairy prices have increased by 24%, which is almost twice the rate of inflation.
Pizza restaurants buy most of the mozzarella cheese produced in Canada, and have been hardest hit by the price increases, which have cost the restaurant industry almost $300 million since 1994.

“Restaurant operators are tired of being burned by rising cheese prices,” says Stephanie Jones, vice president of food supply for the Canadian Restaurant and Foodservices Association (CRFA). “The cost of producing milk has fallen over the past seven years, but none of the savings have been passed on to restaurateurs.”

In a meeting with the Canadian Dairy Commission (CDC) last week, Jones said that it’s a struggle for restaurateurs to absorb overheated prices, when the average Canadian restaurant operates on thin margins of just 6.6% income before taxes. At the same time, price-sensitive consumers are unwilling to foot the bill. Menu prices in quick-service restaurants, such as pizzerias, have increased by just 1.4% so far in 2001, which is below the overall inflation rate.

“We’re one of the dairy industry’s largest customers, and we want to grow the market for Canadian dairy products,” she says. “But constant increases in prices are a huge roadblock that’s actually limiting the consumption of dairy products in Canada.”

Pizza operators also face stiff competition from high-quality frozen pizza products, which are made from lower-priced Canadian cheese or imported tariff-free from the U.S.

The CDC is expected to announce 2002 dairy prices on Dec. 14, 2001.

CRFA is Canada’s largest hospitality association with 15,900 members representing 47,500 foodservice outlets. Members include restaurants, bars, hotels, caterers, institutions, educators and foodservice suppliers. Canada’s $40-billion foodservice industry employs close to one million Canadians.

SOURCE: Canadian Restaurant and Foodservices Association