[getsmart-l] "We don't believe in using additives. It's killing the market. We want to produce good quality cheese."

John O'Gorman jcogorman at sympatico.ca
Tue Jun 15 16:36:38 EDT 2010


David, Goliath & the cheese wars

Two small cheese processors decided it was of value to stand up for cheese standards

WHEN THE MUCH-SMALLER DAVID took on the giant Goliath, he eschewed the King's armour and went into battle protected only by a slingshot and five smooth stones. 

He felled Goliath with a single shot because he thought he could and because he believed he had God on his side.

When tiny St. Albert Cheese Co-op stood up to Saputo, Parmalat and Kraft in last year's Judicial Review of Canada's cheese regulations, they did so armed not with legions of high priced lawyers but with the simple truth: Canadian cheese should be made with Canadian milk. And they had Canadian farmers on their side.

Together with tiny International Cheese of Toronto, St. Albert's filed for intervener status to argue the case for Canada's dairy farmers because, in the words of co-op general manager Rejean Ouimet, "Saputo, Kraft and Parmalat don't want any regulations. That's like a highway with no speed limits. We'd like to see zero tolerance."

"We're a co-op. Our board asked itself, 'Can we put forward our members point of view? Can we stand up as a cooperative owned by 50 milk producers and defend ourselves?'" And they did.

Started in 1894 by a handful of dairy farmers who'd settled the fertile farmland surrounding our nation's capital, their members are today 5th generation farmers and proud of it.

In their plant in tiny St. Albert, 45 minutes south east of Ottawa, 60 employees turn 25 million litres of milk a year into award-winning cheddars and other fi ne cheeses. And loyal consumers beat a path to their door. 

International Cheese of Toronto, the only other intervener in the Judicial Review, is a 40-year-old family-owned and operated company that prides itself in producing "over 32 different cheese products using the freshest ingredients available in the market."

Its website proclaims, "Where making cheese is an art". Their Ricotta is so good it was declared 'world's best' at the World Cheese Championships in 2006. Why did International intervene? Third generation cheese-maker Mike Salvadore puts it quite simply. "We don't believe in using additives. It's killing the market. We want to produce good quality cheese."

Replacing Canadian milk with cheap imported additives (modified milk ingredients such as milk protein concentrates) allows Saputo, Kraft and Parmalat to undercut the prices of quality cheese-makers like Rejean and Mike, making cheese made with real Canadian milk less competitive. "We just want a level playing field," he says.

In their testimony before the Judicial Review, these two brave little Davids spoke up for the rights of Canadian dairy farmers, Canadian cows and Canadian consumers.
Against a trio of Goliaths, Saputo the largest by far.

>From humble beginnings as a Montreal mozzarella-maker in 1954, Saputo Inc. began a period of expansion in the 1990s that saw 20 major acquisitions in as many years. During
this time, padlocks were placed on the doors of many Canadian dairies - including Harrowsmith, Cookstown and Oakville, Ontario, Yorkton, Saskatchewan, Souris, Manitoba and
milk plants in Calgary and Armstrong, B.C. - as Saputo bought up and then shut down local capacity. And local jobs.

Today, with 9,600 employees and 46 plants - 26 in Canada, 16 in the US, 2 in Argentina and 2 in Europe - Saputo Inc. is the 11th largest dairy processor in the world, the largest in
Canada, the third largest in Argentina and among the top three cheese producers in the United States. A mighty Goliath indeed.

At the end of October, Saputo will close its Brampton plant, removing 190 jobs from the local economy. Arguing that the closure makes economic sense for the company,
Saputo promised 120 of those employees jobs elsewhere.

Saputo's third quarter earnings to December 31, 2009 were $104.3 million, up a whopping 80 per cent over last year. Second quarter earnings were $94.5 million, up 37 per
cent over year earlier numbers.

Supported by the testimony of St. Albert and International Cheese, the Federal Court of Canada, in its fall 2009 ruling, upheld Canada's new cheese regulations specifying the
amount of fl uid milk to be used in  the manufacture of Canadian cheese (Canadian Cheddar: 100 percent, soft cheeses: 95 percent, cheddar, Colby, and brick cheeses: 83 percent
and mozzarella: 60 percent.)

But Saputo and Kraft appealed the finding. The Federal Court of Appeal is now reviewing the testimony, including that of St Albert's Cheese Co-op and International Cheese of
Toronto. A final decision is expected in July. 

When the Appeal is fi nally dismissed, dairy farmers and cheese lovers across Canada should stand up and give a bow in the direction of the two brave little Canadian Davids
stood up to Goliaths Saputo, Parmalat and Kraft with simple truth as a weapon. 
Saputo History of Acquisitions

1954 Giuseppe & Maria Saputo begin making mozzarella cheese in Montreal.
1957 Saputo opens it's first company-owned cheese factory in Montreal
1981 Acquires cheese plant in Ontario.
1984 Acquires processing plant for whey protein, lactose, and other food ingredients
1988 Acquires cheesemaker in Vermont, Jefferson Cheese in Maryland (enters US market)
1996 Acquires Fromages Caron in Quebec.
1997 Acquires Crémerie des Trois Rivières (enters liquid milk and ice cream market) Acquires U.S.-based Stella Foods C$563 million (triples in size).
1998 Acquires Wisconsin cheese operations from Avonmore Waterford US $36 million;
    Acquires Froma-Dar Inc
    Acquires Riverside Cheese & Butter Inc
    Acquires Bari Cheese Ltd
1999 Acquires Culinar for $282millionC, leading maker of snack cakes in Canada.
2000 Acquires European cheese specialist Cayer-JCB for $20 million.
2001 Acquires Dairyworld Foods from Agrifoods Intl Co-Op for $400 million (becomes #1 in Canada)
2002 Acquires US cheese division of ConAgra Foods Inc
2003 Acquires Molfi no Hermanos, #3 dairy in Argentina, US $51 million (enters global cheese market)
    Acquires Treasure Cave/Nauvoo brands from ConAgra (leading share of NA blue cheese market).
2005 Acquires Fromage Cote & Distn-Cheddar from Fromage Cote SA & Distn Acquires US Schneider Cheese Inc
2006 Acquires Spezialitaten-Kaserei De Lucia GmbH, Germany
    Acquires Boulangerie Rondeau Inc
2007 Acquires Dansco Dairy Products Ltd (Britain)
    Acquires Cheese & Protein Intl LLC from Land O'Lakes Inc
2008 Acquires Alto Dairy Cooperative (US)
    Acquires Biscuits Rondeau Inc
    Acquires Neilson Dairy from George Weston Ltd
2009 Acquires F&A Dairy of California Inc
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