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For
Immediate Release: Ice
Cream Producers Set the Record Straight on Butteroil Sugar Blends Protectionist
Dairy Farmers of Canada Demand High Tariffs to Scoop $7.5 Million More from Ice
Cream Consumers April
1, 1998 (Toronto) -- Two of Canada’s largest ice cream manufacturers --
Unilever Canada Limited and David Chapman’s Ice Cream Inc. -- today responded
to misleading statements made publicly by the Dairy Farmers of Canada (DFC) that
imported butteroil sugar blends used in ice cream production are costing
Canadian farmers $50 million. “The
DFC should be reminded that according to Revenue Canada and the World Customs
Organization the current tariff classification for butteroil sugar blends is
correct,” said Sean McPhee, spokesperson for the ice cream manufacturers.
“Farmers aren’t losing anything.
The DFC’s position is nothing more than a protectionist demand that
high tariffs be used to divert $7.5 million more from the pockets of ice cream
consumers to the coffers of dairy farmers.” In
1997, imports of butteroil sugar blends for the manufacture of ice cream
replaced approximately 4,300 tonnes of domestic butterfat. Sold domestically,
under Canada’s supply management system which forces Canadians to pay high
prices for dairy products, the farmers’ revenue for the displaced domestic
butterfat would have been $23.1 million. Instead,
farmers sold this displaced butterfat abroad at world prices and received $15.6
million for a difference of $7.5 million -- not the $50 million claimed by the
DFC. “It
is difficult to understand why the farmers want to punish consumers by demanding
high tariffs on the blends for a relatively modest $7.5 million of additional
revenue in a $3.7 billion dairy farming industry in Canada,” noted McPhee. Butteroil
sugar blends, currently imported from Europe, Mexico, the United States and New
Zealand, are used selectively in conjunction with domestically sourced dairy
ingredients to manufacture some ice creams. In
addition to providing a source of butterfat and sugar at prices below the
domestic level, the blends help maintain continuity of supply for single purpose
ice cream plants which often experience cream shortages under Canada’s
restrictive and inflexible milk supply system.
Single purpose ice cream plants are those which are not owned by a dairy.
In Ontario, for example, these plants are prohibited from sourcing more
than 50 per cent of their butterfat requirements from whole milk.
Additional quantities can only be purchased from the secondary sweet
cream market where supply fluctuates and prices are often very high. “As
a major trading nation, Canada has benefited from the stability and order
resulting from the trading rules under the World Trade Organization (WTO),”
added McPhee. “It follows that as
Canadians we all have an obligation to observe those rules and resist internal
pressure to violate agreements to appease vested domestic interests.” Under
the WTO agreement, Canada and all member countries have agreed to bind their
tariffs on agricultural products against increase. A rate of duty cannot be increased without renegotiation
through WTO procedures with all supplying countries to address issues such as
compensation. Unilever
Canada Limited manufactures ice cream through its Good Humor Breyers operating
division. Brands include Breyers
All Natural, Breyers Classic, Good Humor, Richard D’s and
Viennetta. David Chapman's Ice
Cream Inc. produces Chapman's ice
cream at its Markdale, Ontario manufacturing facility. --
30 -- For
information: Sean
McPhee |
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