Canadian push to deregulate food package sizes worries Ontario town where Heinz makes ketchup
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Pittsburgh's H.J. Heinz Co. opened a plant in Leamington, Ontario, in 1909. It wasn't long before the company had lined up area farmers to supply produce so it could begin shipping out pickles, ketchup and vinegar.
The plant is still cooking in the "Tomato Capital of Canada," the nickname claimed by the 30,000-resident community on Lake Erie's north shore, but Mayor John Paterson is worried the historic factory -- as well as thousands of food processing jobs across Canada -- could be threatened by a proposal from his country's own government.
"It scares the heck out of me thinking about what could happen here," said Mr. Paterson.
The Canadian Food Inspection Agency is proposing to eliminate regulations on the size of containers for certain foods, including ketchup. In other words, the government would get rid of rules that currently mean Americans see different size containers of some items than Canadians do.
That's a good thing, according to Canada's Agriculture Minister Gerry Ritz, who says keeping an eye on package sizes takes up valuable time that inspectors could better spend focused on food safety.
"These changes will give consumers more options at the grocery store and give industry more packaging choices," according to a statement from the minister, emailed by one of his aides.
The industry itself doesn't seem so sure.
"You can't just do something and think it's small -- because it's something big," said Christopher Kyte, president of Food Processors of Canada, based in Ottawa. The organization has created a website, KeepFoodJobsInCanada.ca, that urges people to contact their representative in Parliament or Mr. Ritz.
Among the claims on the site: "Since 2007, some 13,000 food manufacturing jobs have been lost as a result of more than 80 plant closures. Deregulation has the potential to accelerate the trend experienced during the last five years."
The fear is that when no longer required to make packages specifically for Canada, global companies will shift their production to other, less-expensive places, like, say, the big Heinz ketchup plant in Fremont, Ohio. "They have excess production that they could easily fill the Canadian market," worries Mr. Paterson.
It turns out the U.S., which has lost more than a few jobs to less-expensive workforces in Asia and Central America, may be playing the role of low-cost competitor to its northern neighbor.
Those fighting the package size rule change say that Canadian labor costs tend to be higher because of issues such as minimum wage levels and health care coverage.
The government regulations on container sizes, which evolved over the past several decades, affect everything from maple syrup to wine, honey, sandwich meats, bacon, canned and frozen fruits and vegetables, according to the food processors group.
The Canadian Food Inspection Agency said some of the regulations establishing package sizes were created in the 1970s as a way to help consumers comparison shop. That's no longer needed, an agency spokeswoman Suzi Beck said in an email. "Unit pricing is now common and it effectively helps with this comparison."
She said regulations have helped industry members introduce and promote products in an orderly manner, but they also could add costs in getting new and different product lines approved.
When the Food and Consumer Products of Canada association polled its members, some were "keen to move with repeals immediately, while other members have requested other approaches," according to a letter sent to Canadian officials by that organization.
Until the regulatory process concludes, Ms. Beck noted, the current rules stay in place.
Mr. Paterson is one of a group of mayors hoping to get a broader review of the various issues involved.
His particular fear is that just eliminating the food package restrictions will pit Heinz Canada against those looking for cost efficiencies at the parent company in Pittsburgh who might ask, "'Why do we need a plant in Canada?' That's what we're scared about," Mr. Paterson said.
Heinz Canada already has raised objections, saying it is in favor of taking a "holistic, transparent, consultative approach to regulatory reform," and questioning why more of those affected weren't consulted in developing the new policy.
"Of particular concern is the Canadian Food Inspection Agency's intention to deregulate container sizes for many packaged foods sold in Canada. This change does not help consumers and has implications for producers, processors and communities," the company said in a statement.
Mr. Kyte believes Canadian food processors would probably be forced to retool production lines if they have to change container sizes to compete, something that could cost hundreds of thousands of dollars.
Agriculture Minister Ritz's statement promised more discussion. "We'll continue to work with industry to bring forward these changes in a way that works best case by case.
"There is a multi-year transition period."
Heinz Canada is pretty well entrenched in Canadian homes. The division's website, which says the company employs more than 1,200 people in the country, claims Canadians have the second highest per capita ketchup consumption in the world and that Heinz is the market leader there.
Back at headquarters in Pittsburgh, the division is getting support.
"As a global food company, Heinz has made significant strategic investments to grow our business in Canada over the past 100 years," said Michael Mullen, senior vice president of corporate and government affairs, in an email.
"We are proud of the fact that virtually everything we sell in Canada is produced locally in Canada. We believe that we have strong consumer loyalty in Canada because we make their favorite products, like Heinz ketchup, right there in Canada.
"The H.J. Heinz Co. supports Heinz Canada's position on this issue and we continue to monitor the situation closely."
First Published January 17, 2013 12:33 am