Canadian milk police strike again

As I enjoyed my Greek yogurt this morning, I pondered one of Adam Smith's less famous quotes: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contri

As I enjoyed my Greek yogurt this morning, I pondered one of Adam Smith’s less famous quotes: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

Greek yogurt has turned into a major growth story in the food business, attracting health-conscious eaters with less sugar and more protein than regular yogurt. Chobani, a yogurt startup founded by a Turkish immigrant to New York, has succeeded in popularizing the product beyond almost anyone’s expectation. According to Bloomberg, the company captured 17 per cent of the U.S. yogurt market in 2012 with sales of over US$700 million. Not bad for a company that was started with a small business loan in 2005 and only shipped its first case of yogurt in 2007.

People in the Canadian milk trade have been having lots of meetings about Chobani and, as Adam Smith would have predicted, they are doing their best to keep Chobani off Canadian grocery shelves.

Those wholesome milk ads you see on TV don’t mention some important facts about the Canadian dairy industry. The Canadian yogurt cartel is protected by tariffs of 240 per cent slapped on foreign yogurt. According to media reports, Chobani even tried to build a $76 million yogurt plant in Ontario, worth 1,300 jobs, but ran into the Canadian milk bureaucracy. Chobani has now put its Canadian plans on hold, since it was unable to get sufficient access to Canadian milk quotas.

Absurdly, in Canada, if you want to buy a lot of milk you are not allowed to just go buy it from farmers. There is a complex inter-provincial quota system dating back to the 1960s, allocating 44 per cent of Canada’s industrial milk production to Quebec and 32 per cent to Ontario. Even more silly, Ontario has a 200-million-litre skim-milk surplus that producers now convert to animal feed. Chobani was unable to get the milk police to give it a multi-year milk supply commitment.

The Canadian yogurt establishment also sued brazenly in open court to block competition, claiming that competition from Chobani would cost it revenue. Any Yukon small business owners reading this should ask themselves if they are allowed to sue if a competitor eats into their business.

According to FreeYourMilk.ca, the rival lobbying group run by Canadian pizza companies and cheese users, the Canadian milk police cause prices for cheese, milk and yogurt to be as much as double that of international levels. This, indeed, is why a shockingly high tariff of 240 per cent is required to keep them off Canadian breakfast tables.

It is hard to find an economist who is not in the pay of the milk industry who thinks this is good for Canadians. Ian Lee, a business professor at Carleton University who specializes in the topic, told the National Post that “it is protectionism – rank, outrageous protectionism.” He went on to echo Adam Smith by saying that the system is “classic exploitation of consumers by a very small minority.”

Lower-income Canadians who spend a higher percentage of their incomes on food are particularly hard hit. While the newspapers are often filled with stories about the challenges of reducing poverty, hardly anyone ever asks why it is a good idea that Canadian poor people should pay extra for their milk and pizza.

The system is very good for dairy farmers and established dairy processing companies. The industry would have you think these are all traditional family farms. In practice, many of these farmers have assets far in excess of your own. And the yogurt is made by multinational food companies who just happen to have been in Canada already when the system got set up.

More cynical lobbyists for the industry also raise health concerns. They really hope to scare Canadians into not eating Australian, New Zealand or American cheese. We are not talking about North Korean imports here. And if health was really an issue, the Canadian government would not permit foreign yogurt at all. As it is, the government admits foreign yogurt is safe to eat. It just charges that 240 per cent tariff to help well-established insiders in the dairy industry.

Dairy is not the only Canadian industry that seems to have turned a bit too cozy for producers at the expense of regular folk. Think about cellphones, air travel, beer, banking, cable television and more. In every industry, the producers have the time and money to lobby the government for special treatment. The rest of us don’t bother to resist. The 240 per cent tariff means millions in profits for established Canadian agri-businesses. For each Canadian, it is just a few more bucks at the till. Hardly worth complaining about.

One would hope that our politicians would stand up for regular Canadians. But they are often in the pocket of vested interests. Both Liberal and Conservative governments have built and protected the dairy system in Canada.

Martha Hall Findlay, a former Liberal MP, campaigned against the dairy cartel when she ran (unsuccessfully) for the Liberal leadership. James Moore, the current Conservative industry minister, has been engaged in a very public spat with the Canadian cellphone cartel about whether or not to let a big American cell phone company into Canada.

Hopefully more politicians will pick up this theme. Until they do, you’ll just have to swallow the fact that every bite of dairy you enjoy makes some Canadian fat cat just a little bit fatter.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. You can follow him on

Twitter @hallidaykeith

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Willow Brewster, a paramedic helping in the COVID-19 drive-thru testing centre, holds a swab used for the COVID-19 test moments before conducting a test with it on Nov. 24. (Crystal Schick/Yukon News)
An inside look at the COVID-19 drive-thru testing centre

As the active COVID-19 case count grew last week, so too did… Continue reading

Conservation officers search for a black bear in the Riverdale area in Whitehorse on Sept. 17. The Department of Environment intends to purchase 20 semi-automatic AR-10 rifles, despite the inclusion of the weapons in a recently released ban introduced by the federal government, for peace officers, such as conservation officers. (Crystal Schick/Yukon News file)
Environment Minister defends purchase of AR-10 rifles for conservation officers

The federal list of banned firearms includes an exception for peace officers

Yukonomist Keith Halliday
Yukonomist: The K-shaped economic recovery and what Yukoners can do about it

It looks like COVID-19 will play the role of Grinch this holiday… Continue reading

Jodie Gibson has been named the 2020 Prospector of the Year by the Yukon Prospectors Association. (Submitted)
Jodie Gibson named 2020 Prospector of the Year

Annual award handed out by the Yukon Prospector’s Association

A number 55 is lit in honour of Travis Adams, who died earlier this year, at the Winter Wonderland Walk at Meadow Lakes Golf Club in Whitehorse on Nov. 24. (Crystal Schick/Yukon News)
A new take on holiday traditions

Winter Wonderland Walk, virtual Stories with Santa all part of 2020 festive events in Whitehorse

Black Press Media and BraveFace have come together to support children facing life-threatening conditions. Net proceeds from these washable, reusable, three-layer masks go to Make-A-Wish Foundation BC & Yukon.
Put on a BraveFace: Help make children’s wishes come true

Black Press Media, BraveFace host mask fundraiser for Make-A-Wish Foundation

Colin McDowell, the director of land management for the Yukon government, pulls lottery tickets at random during a Whistle Bend property lottery in Whitehorse on Sept. 9, 2019. A large amount of lots are becoming available via lottery in Whistle Bend as the neighbourhood enters phase five of development. (Crystal Schick/Yukon News file)
Lottery for more than 250 new Whistle Bend lots planned for January 2021

Eight commercial lots are being tendered in additional to residential plots

The Government of Yukon Main Administration Building in Whitehorse on Aug. 21. The Canada Border Services Agency announced Nov. 26 that they have laid charges against six people, including one Government of Yukon employee, connected to immigration fraud that involved forged Yukon government documents. (Crystal Schick/Yukon News file)
Charges laid in immigration fraud scheme, warrant out for former Yukon government employee

Permanent residency applications were submitted with fake Yukon government documents

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

Karen Wenkebach has been appointed as a judge for the Yukon Supreme Court. (Yukon News file)
New justice appointed

Karen Wenckebach has been appointed as a judge for the Supreme Court… Continue reading

Catherine Constable, the city’s manager of legislative services, speaks at a council and senior management (CASM) meeting about CASM policy in Whitehorse on June 13, 2019. Constable highlighted research showing many municipalities require a lengthy notice period before a delegate can be added to the agenda of a council meeting. Under the current Whitehorse procedures bylaw, residents wanting to register as delegates are asked to do so by 11 a.m. on the Friday ahead of the council meeting. (Crystal Schick/Yukon News file)
Changes continue to be contemplated for procedures bylaw

Registration deadline may be altered for delegates

Cody Pederson of the CA Storm walks around LJ’s Sabres player Clay Plume during the ‘A’ division final of the 2019 Yukon Native Hockey Tournament. The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28 in Whitehorse next year, was officially cancelled on Nov. 24 in a press release from organizers. (John Hopkins-Hill/Yukon News file)
2021 Yukon Native Hockey Tournament cancelled

The 2021 Yukon Native Hockey Tournament, scheduled for March 25 to 28… Continue reading

Lev Dolgachov/123rf
The Yukon’s Information and Privacy Commissioner stressed the need to safeguard personal information while shopping this holiday season in a press release on Nov. 24.
Information and Privacy Commissioner issues reminder about shopping

The Yukon’s Information and Privacy Commissioner Diane McLeod-McKay stressed the need to… Continue reading

Most Read