Kosher crunch

Supply management inflates kosher-food prices

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The Canadian Jewish community is getting gouged at their local deli. As is often the case with overly high food prices in Canada, it’s a direct result of the bureaucratic nightmare that is Canada’s collectivist dairy and poultry regime. For those stuck paying the higher prices, that just isn’t, well, kosher.

To be a player in the dairy or chicken industries in Canada, you need quota. That quota permits you to produce and sell your product to marketing boards, which award the quotas and sell the product on the not-so-open market. The federal government, in turn, ensures the market supremacy of those quota-holders by enforcing tariffs that can reach as high as 300 per cent and by making it illegal to smuggle dairy or chicken across the border. The Conference Board of Canada recently reported that supply management, and the higher dairy and chicken prices that result, costs the average family $276 a year.

But that figure is undoubtedly higher for those who follow traditional Jewish dietary laws, which say that, among other things, a chicken must be drained of all its blood and that cheese cannot contain ingredients from forbidden animals. That’s because access to those foods is inherently tight—production of kosher chicken is limited due to protective barriers that prevent new companies from entering the market, while kosher cheese isn’t produced in Canada at all.

The federal government had given the Jewish community a break, with special exemptions from high tariffs on these products. But then in September 2012, the Conservatives revoked those permits. “It did cause, for a short period, just an insane price for cheese products,” says Shimon Fogel, CEO of the Centre for Israel and Jewish Affairs. A spokesperson for International Trade Minister Ed Fast refused to say why those permits were unceremoniously yanked, especially just weeks before Rosh Hashanah—the feast of the Jewish New Year. Protest from the Jewish community pushed the government into restoring the permits about a month later.

Fogel says the cheese problem was nothing new. “We’ve been dealing with this in one form or another for a number of years.”

Most recently, the issue has been a chicken shortage. Last year, the owner of Chai Kosher Poultry shut down its Toronto waterfront factory and sold its quota, which are highly valued, to a non-kosher producer. The only other producer in Canada, Montreal-based Marvid, suddenly had to meet the demand of the entire market. “First it was a shortage, then there were price hikes,” says Toronto Rabbi Israel Janowski.

“The effect on the kosher community has been quite drastic,” says Richard Rabkin, managing director of Cor, an organization tasked with certifying kosher products. He says with Passover coming up, many Jewish families will be paying significantly more.

Alan Burke is president of the East Beach Community Association, and he’s been trying to reopen the Chai plant and bring back its 50 jobs. The group cobbled together funds and struck a deal to lease the old Chai factory. Then it hit a wall—the factory can’t get any quota. In the interim, kosher chicken prices have jumped by 50 per cent, inflating grocery bills of Orthodox Jewish families across the country.

“Everybody who has the regular chicken quota doesn’t want to sell it. It’s a smaller number of players, and quota is worth a fortune,” says Burke. “The other producers, from what I can see of the situation, just want to delay another entry into the market.”

Since it’s the industry that manages its own affairs by way of the provincial marketing boards, which hand out the quotas, critics say mega-producers call the shots. Burke says he and representatives from the Jewish community hatched a solution with the chicken marketing boards to create a special type of quota for specialty producers. That was supposed to have happened in September, and there’s been no progress since. Michael Edmonds, the director of communications and government relations for the Chicken Farmers of Ontario, says the organization gives special consideration to specialty producers, but that it will award quota only if there is a business case for doing so. “Ultimately, it will be a business decision on the part of investors,” he says.

“The insanity of it is that you’re talking about such a small market that in no way can cannibalize the existing market,” says Fogel. “Those who keep kosher will never go to a non-kosher product as an alternative. Either they’ll have it, or they just won’t have it.”

But then, no one ever said Canada’s supply management system was sane.




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