Two of Canada’s largest cheese makers have suffered a decisive and costly legal defeat in their attempt to overthrow Canada’s rules governing cheese compositional standards.
The Federal Court of Appeal has ruled that Saputo Inc. and Kraft Canada Inc. were dressing up self-interested economic complaints about the regulations as legal arguments.
The judges dismissed the appeal and told the companies they would also have to pay legal costs incurred by the Canadian Food Inspection Agency in defending the regulations that took effect in 2008.
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The compositional standards force cheese makers to use more Canadian milk rather than cheaper milk protein imports by setting a required fixed percentage of casein content derived from liquid milk.
They were long promoted by Dairy Farmers of Canada.
At the federal court and then at appeal, lawyers for the cheese makers argued the rules were unenforceable, beyond federal power and would impose millions of dollars of added costs on manufacturers while rewarding dairy farmers with higher incomes.
The main argument to the appeal court judges came in statements from Kempton Matte, a Saputo employee and according to the judgment, “a lobbyist for the Canadian dairy processing industry.”
The judges said the cheese makers’ evidence did not properly describe the real purpose of the regulations and how they were developed.
“The Matte affidavit reflects the particular views and beliefs of an industry lobbyist.”
Federal agriculture minister Gerry Ritz praised the court for upholding the power of Ottawa to set compositional standards for food.
“Canadians expect cheese to be made of real milk and this decision will ensure it is.”
Dairy Farmers of Canada also cheered the decision.
“We had no doubt the federal government had the right, and a role, to regulate on cheese standards,” DFC assistant director for strategic communications Thérese Beaulieu said in a reaction to the ruling.
She said there is no way to calculate whether the standards that require more milk use have been a financial boon for milk producers.
“We can only observe that cheese consumption has increased in the last years,” she said.
“More new cheeses have been developed, so while we won’t say it is because of the standards, the standards have certainly not hindered growth in the cheese industry.”
Beaulieu said a key reason for DFC support of tougher compositional standards was that cheese would be more consistent and live up to consumer expectations.
Therefore, the dairy farmer lobby was interested in the court’s reasoning that compositional standards will allow “producers, manufacturers and consumers to rely on a uniform quality standard for such products, thus increasing consumer confidence and ensuring fair and efficient market competition between industrial players while increasing available markets.”
The judges said it means consumers can buy cheese made anywhere in the country and know that it meets a consistent standard.
