The Canadian government has reached a deal to dramatically increase the amount of cheese it imports from the European Union (EU) duty-free, angering the country’s dairy sector.
Trade Minister François-Philippe Champagne announced that after protracted negotiations with the EU, the new Comprehensive Economic and Trade Agreement (CETA) would now allow 18,500 tonnes worth of European cheese per year to be imported into Canada tariff-free.
Under Canada’s current Supply Management System for dairy products, imports are severely limited in order to manage domestic market prices.
Imports currently constitute about 5% of Canada’s current cheese market but under the new CETA, starting from 21 September, cheese imports will be bumped up to 9%, with 7.5% coming from Europe.
The CETA outlines that businesses wishing to import cheese will have to apply for a Tariff Rate Quota (TRQ) licence and will have the authority to select and import cheeses not currently available in Canada and also bring in familiar cheeses at a lower price to compete with domestic cheese.
The Canadian dairy sector, especially cheese manufacturers, had hoped to be given a higher portion of the TRQ licences to help prevent competition with domestic cheese but were only allocated half, with the other half going to retailers and distributors.
Pierre Lampron, Dairy Farmers of Canada president, said his association, along with the Canadian Alliance of Cheese Makers and the Dairy Processors Association of Canada, had formed a united position.
“We had hoped the government would prioritise the allocation of the new TRQs to cheese makers, who would have imported cheese that are not already produced in Canada, providing greater variety of cheese to Canadian consumers, while supporting the continued growth of the Canadian dairy sector,” he said.
Canadians consumed approximately 450m kgs of cheese in 2015—or 12.5kgs of cheese per person—according to the federal government’s Canadian Dairy Information Centre.
Jacque Lefebvre, Dairy Processors Association of Canada president, said allocating 50% of the licences to retailers could displace domestic cheese and damage the dairy industry.
“If we are making Canadian brie, why would you import brie?" he said.
"We could have instead expanded our offerings and by doing so also maintained the levels of domestic milk we purchase.
“Any licence you give to retailers, you are giving up the whole supply chain to them.”
Meanwhile, the federal government simultaneously announced their four year $250m Dairy Processor Investment Program, to support upgrades to cow milk dairy farming technology—including large investments up to $250,000 per licenced dairy farm for automated milk and feeding technology and smaller investments into herd management or barn operation equipment.