QUEBEC CITY (Staff) — As president of the Canadian meat packers lobby and industry organization, John Lauer has reasons to smile.
The Canadian International Trade Tribunal has released a complimentary report after a year-long study of industry competitiveness. New North American and world freer trade rules will give the industry a better crack at new markets.
Lauer, an executive with J.M. Schneider Inc., said cattle producers and packers are ready and anxious to compete.
“The world can be ours,” he said in his speech to the Canadian Meat Council meeting Feb. 3.
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Yet Lauer said in an interview later that there also are problems and uncertainties facing the industry.
Although generally making money, the industry is not profitable enough to make required investments, said Lauer. And there is still packing plant overcapacity, particularly in Alberta.
“I would expect to see some further rationalization, perhaps in the Gainers situation which is a thorn in everyone’s side and should be an embarrassment to the Alberta government.”
Improve customer relations
A number of speakers argued that to be competitive in world markets, the Canadian industry must keep its prices down and improve its effort and attitude when dealing with customers. Lauer said this “attitude change” must also be extended to other groups in the sector.
“I know when farmers hear processors talk about becoming more efficient, they think that means squeezing them for lower prices,” he said. “They are suspicious and I understand that. But I say that we must work with all links in the chain to see how we can keep costs down, become more efficient. It may not mean demanding lower prices from our suppliers at all.”
Lauer said one of the positive developments for the industry is that governments have become more co-operative, less intrusive and more open to arguments in favor of deregulation.
However, the convention also raised two areas in which the industry may soon find itself in conflict with government.
Jean-Marc Johnson, a former Quebec premier and now an adviser to the United Nations, told the meeting that environmental regulations are the next frontier for government intervention in business affairs.
“You thought governments were out because of the talk of deficits but government is getting back in through environmental regulations,” said Johnson. In fact, delegates listenedto presentations on environmental issues for their industry, ranging from packaging to waste management.
Anne Mackenzie, head of Agriculture Canada’s food inspection directorate, told the meeting department officials want to begin negotiations with the packing industry over an expanded cost-recovery program.The goal will be to charge beneficiaries of government inspection and grading more for the services they receive. In the past decade, the cost of the government’s inspection service has increased to $132 million annually from $91 million.
