CRFA Bemoans Provincial Subsidy to Dr. Oetker

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LONDON — It’s been a mixed bag of emotions in Ontario this week, as one Mississauga-based pizza manufacturer announced plans to build a new plant and The Canadian Restaurant and Foodservices Association (CRFA) voiced concern about the company receiving a government subsidy.

Dr. Oetker is preparing to open a new plant in London, Ont., to feed its frozen-pizza production, which has doubled in the past five years. The building plan comes on the heels of a $7-million provincial kickback, according to the London Free Press.

The foodservice industry is upset about the announcement. “Our members are deeply troubled your government is using tax dollars, paid by our members, as a direct subsidy to their competitors who threaten their market share and ongoing businesses viability,” reads a letter to Carol Mitchell, the Ontario minister of Agriculture, Food and Rural Affairs, sent by Garth Whyte, president and CEO of the CRFA.

It comes down to the price. “Restaurants continue to struggle to compete under Canada’s Supply Management System that supports a two-tiered pricing system for cheese,” continues Whyte. “This unfair system has created an unlevel playing field that directly benefits frozen pizza manufacturers at the expense of the restaurant industry’s fresh pizza makers who are forced to pay about 30 per cent more for the very same cheese inputs. In addition to this price break on input costs, frozen pizza manufacturers get a second break as their product escapes HST at grocery retail giving them a double price advantage at the checkout till.”

Meanwhile, London, Ont., dairy farmers have something to smile about as there are plans to source more than 24-million pounds of ingredients from local farmers and processors to produce the frozen pizzas at the Dr. Oetker facility, expected to be operational by 2014.

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