With sales of more than $3.8 billion, Agropur cooperative is owned by 3,348 dairy farmers, processing more than 3.3 billion litres of milk per year in its 31 plants across North America.
A final agreement is expected within the next few weeks, and requires Dairytown’s 207 New Brunswick dairy farmers to vote on the proposed merger. The transaction is subject to final approval after conducting a due diligence review and obtaining the usual authorizations, including those of Canada's Competition Bureau and other authorities.
Pizzerias urged not to raise prices, use cheaper cheeses
Higher cheese prices could raise restaurants’ food costs, but industry experts say now is not the time to raise menu prices or switch ingredients to compensate for the increase.
Food commodities analyst John Barone said restaurants which didn't lock in supply contracts last fall face the biggest challenge, especially until milk supplies grow and cheese prices come down.
Restaurant industry consultant Dennis Lombardi said the situation likely would be tougher on smaller chains and independents – who don't have volume buying power – rather than the larger chains.
Anthony Rosati, a principal owner of the Chicago-based Rosati’s Pizza in Chicago, and a member of the National Restaurant Association’s Pizzeria Council, said that while the rising price of cheese is a concern, pizza operators “are very accustomed to a fluctuating cheese market and our rule of thumb is not to panic or overreact. We know from years of experience that as quickly as the prices rise, they can just as quickly fall.”
Rosati advised his fellow pizza operators not to raise menu prices to compensate for the increased food cost or try and switch to a less expensive product in the interim.
Hudson Riehle, the NRA’s senior vice president of research, said consumers are still cautious on spending, which could make it challenging for restaurateurs to raise menu prices.
According to the NRA’s 2014 Restaurant Industry Forecast, consumers remain stuck in a recession mindset when it comes to their personal finances even though the level of pent-up demand for restaurant services is high.
Source: National Restaurant Association