TORONTO/CNW/ - The Food and Consumer Products Manufacturers of Canada (FCPMC) is appalled at the Canadian Dairy Commission's (CDC) decision to ignore consumer and industry concerns by announcing an exorbitant and unjustified increase in the price of industrial milk, used to make dairy products such as cheese, ice cream and yoghurt.
On December 14, the CDC granted an increase in the price of industrial milk, which translates to an increase of more than 3 per cent over the current price food processors pay, effective February 2002. Since 1994, the consumer price index (CPI) has seen an average annual increase of 2 per cent while the cost of industrial milk has skyrocketed by over 20 per cent, representing a 3 per cent average annual increase. "Any increase in our uncertain economic climate is completely unjustified, especially since the producer's cost of production has fallen by an average of -1 per cent per year," said Laurie Curry, Vice President Public Policy & Scientific Affairs, FCPMC.

Significant annual increases are a serious impediment to both the continued growth and competitiveness of the dairy processing industry. "These unrelenting increases are starving innovation in this industry," said Curry. "Innovation is happening, but it's coming from food manufacturers searching for more and more non-dairy substitutes for the products they produce for the domestic market, as well as sourcing dairy ingredients internationally for the products they export," continued Curry.

The Canadian processing industry continues to do its part to foster growth in the industry by eliminating costs from the system, and by focusing its efforts on innovation and productivity as core strategies to deliver added value to consumers. "Our ability to keep price increases to a minimum has resulted from improvements in efficiency and reduced margins, but the industry has now reached its capacity and can no longer afford to absorb more price increases," said Curry.

Currently in Canada, food processors pay approximately 20 per cent more for industrial milk versus their U.S. counterparts, while continuing to provide Canadian consumers with lower priced dairy products. The lower priced products provided to Canadians are, therefore, a result of greater efficiencies in the Canadian dairy industry past the farm gate.

The Canadian dairy industry must work with all supply chain partners to build a sustainable industry, which offers consumers a wider range of products at competitive prices. To grow the potential market, the dairy industry has to focus collectively on improving the value and choice of dairy products through innovation, and progressively eliminating unnecessary costs from the system.

FCPMC is the industry association representing over 165 Canadian-operated member companies that manufacture and market food and consumer products. These companies sell their products through retail and foodservice outlets. The food and beverage manufacturing industry employs over 214,000 Canadians, contributes 12.1 per cent (over $15 billion) of the Manufacturing Gross Domestic Product, and purchases 35 per cent of Canadian agricultural products.

SOURCE: Food and Consumer Products Manufacturers of Canada