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ESPANOLA -- Recent government changes to the way fluid milk is distributed in the North are forcing dairy owner Mike Farquhar to become a travelling salesman.
The changes remove regional milk distribution borders and open up the market to all the North's eight milk processors, including four belonging to huge, multi-national and international corporations.
Now the president of Farquhar's Dairies Ltd. is spending more time on the road, trying to get a foothold in the competitive milk market, than he is running the 65-year-old family business from his Espanola office.
In late May, the Ontario Farm Products Marketing Commission amended its policy for the licensing of milk distributors in Ontario. In Northern Ontario, regional distribution borders came down June 1, and by August 1 of next year, the barriers blocking southern Ontario milk processors from selling their milk in northern markets will also be removed, resulting in even more competition.
Farquhar says the changes leave him no choice but to diversity and expand into other markets such as the ice cream industry. He says the corporate dairy giants are taking the cream of the fluid milk market in the North, and leaving independent dairy owners with the skim.
The independent dairy processors, Farquhar's Dairy, Archer's Dairy in Kirkland Lake, Community Dairy in Kapuskasing and Vacationland Dairy in Kenora, are competing with Copper Cliff Dairy in the Sudbury region, which is owned by Ault Foods Ltd. (part of Agropur of Quebec), and Beatrice Foods milk processors in Sudbury, Thunder Bay and Timmins. Beatrice Foods is part of Parmalat Finanziaria S.p.A. of Italy -- the world's largest dairy company.
With the removal of the north-south borders, Northern Ontario dairies will also be competing with more multi-national giants such as Neilson's Dairy, which is owned by the Weston Group (which also owns Loblaws and National Grocers).
The corporate dairies are landing the large accounts to supply milk to the bigger grocery-store chains, leaving the independents to supply milk to smaller operations such as convenience stores.