Increased Ingredient Costs Threaten Manufacture of Food Products in Canada

CANADA - The Manitoba Food Processors Association warns the increasing cost of ingredients for processed food products threatens to drive the production of many of these products out of Canada, writes Bruce Cochrane.
calendar icon 17 April 2008
clock icon 3 minute read

Prices for most of the crops used to manufacture food products have seen some dramatic increases recently.

Manitoba Food Processors Association executive director Dave Shambrook says, while it's good to see higher returns coming back to producers, the higher ingredient costs are making it difficult for some of the small and medium sized processors.

Dave Shambrook-Manitoba Food Processors Association

In some cases companies will not be able to adjust and in some cases, the worst case scenario, they're closing the doors and getting out of the industry althogher.

That's always a part of the natural progression of things.

There's always evolution in all industries but what is also happening right now for many companies, they're saying we manufacture 10 or 20 or 30 or in some cases 50 and 100 different product lines.

There's some that aren't as profitable for us or there's some that with this new price structure we can't produce them here anymore profitably.

We let them go.

We shut down those production lines.

What's happening, you and I as a consumers again we still want those products and the grocery retailers need to have them on the shelf so where they're going is offshore and that's why we're seeing many more products coming into Canada and the United States that are manufactured in China or in India and it is a global society for sure but the long term implications are a little bit frightening for me, in terms of once these production capabilities are to move off shore, how likely are they to come back to Canada if pricing and such changes in the future.

Shambrook notes the quality of Canadian products are as high as anything in the world but, once the manufacture of these products move offshore, the ability to deal with food safety issues is much reduced, as evidenced by several food safety incidents that have been traced back to offshore products or ingredients over the past year.

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