Cheesy restaurant dishes may soon cost more
Restaurateurs are crying foul over a second industrial milk price increase this year set to take effect Thursday, which they say will likely lead to higher food prices.
In July, the Canadian Dairy Commission decided to raise the price of industrial milk _ which is processed into yogurt, ice cream, cheese and butter _ by 2.76 per cent. That’s on top of a 2.2 per cent hike that occurred in February.
It’s the first time the CDC has increased prices twice in one year since 2008. The latest hike is being introduced because of a “very unique and unexpected situation,’’ Benoit Basillais, CDC’s chief of policy and economics, said in an email.
Basillais said the hikes came because producer revenues “decreased rapidly’’ last fall, in part due to a decrease in global demand from importing countries and changing consumer preferences _ and revenues did not stabilize by early spring as anticipated.
The increase will alleviate producers’ financial stress and ensure the fall’s high demand for dairy products is met, he said.
Basillais added that the move was intended to be “an advance’’ of the CDC’s December price decision for next year, though he said it’s premature to say there will be no increase next year.
While the hike in prices may provide a reprieve for producers, it’s likely to put a burden on restaurateurs who must decide whether their customers can stomach higher prices.
Bill Pratt owns eight restaurants and four food trucks in the Halifax area under the Chef Inspired Group of Restaurants banner. Their menus boast gourmet burgers, poutine, burritos, tacos and quesadillas.
“We’re a heavy cheese user,’’ Pratt said, adding that the price increase is “very difficult for us.’’
Pratt has already raised prices once this year and doesn’t think his customers will take kindly to another one so soon.
He said he’ll likely have to absorb the cost, which could be difficult considering restaurant profit margins are low in Canada. In 2012, the operating profit margin for food services and drinking places was 4.2 per cent, according to Statistics Canada.
“I’m the guy down here that’s kind of struggling to make a buck in a very tough market,’’ Pratt said.
It seems likely diners will end up paying more, according to Pierre Cadieux, vice-president of federal and Quebec government relations for Restaurants Canada, a notfor-profit association representing 30,000 businesses in the restaurant and food-service industry.
“That (price hike) has to be passed on to the consumer somehow,’’ he said. “So, it’s reflected in our menu prices. It’s reflected in changes to the menu.’’