As Dairy Farmers of Canada launches an aggressive media campaign to counter restaurant industry allegations of excessive domestic dairy product prices, the restaurateurs have another pizza bone to pick with Ottawa.
Recently, the federal government announced a $12 million grant to a foreign-owned frozen pizza company that will make London. Ont., its production centre for North American sales.
The company, Dr. Oetker Canada, promised to create at least 120 jobs in the southwestern Ontario city, and that brought a bevy of Conservative cabinet ministers and London-area MPs to the announcement to tout more job creation.
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The Canadian Restaurant and Foodservices Association immediately fired back.
Not only is the restaurant industry saddled with high pizza cheese prices because of supply management, which make them less competitive against take-home frozen pizza, but now Ottawa is subsidizing the competition, it complained.
“Your government’s announcement may be good news for this foreign-based multinational, but it is precisely the opposite for CRFA members,” association president Garth Whyte said in a letter to agriculture minister Gerry Ritz.
“They are asking why is your government so ready to give multimillion-dollar taxpayer handouts to their competitors while a ‘made-in-Canada’ policy penalizes them?”
The restaurant sector argument is two-fold.
Domestic fresh pizza makers must pay the full cost of supply management pricing on pizza cheese, a 30 percent disadvantage they say, while frozen pizza manufacturers have access to cheaper mozzarella cheese under a 1989 rule on special class pricing.
“Restaurants have struggled to compete with lower-cost frozen pizza products,” Whyte wrote.
“To add insult to injury, frozen pizza manufacturers get a second break as their products escape (sales) tax at retail stores, which gives them a double price advantage.”
Whyte said it shows the need for “a genuine review of the supply management system and the introduction of fair dairy pricing for domestic restaurant operators.”
There was no immediate response from the federal government, which typically ignores CRFA complaints about supply management pricing policies.
Whyte said the same frozen pizza manufacturer received a $7 million subsidy from the Ontario government last year.
“Our members are deeply troubled that your government is using tax dollars, paid by our members, as a direct subsidy to their competitors who threaten their market share and ongoing business viability,” wrote Whyte.
