About 75 jobs at SunGold Specialty Meats Ltd. in Innisfail have been lost due to trade issues thousands of kilometres away.
SunGold stopped processing beef for export to Europe after its access to that market was choked off by “illegitimate importers” snapping up available quota, said Rick Paskal, CEO of SunGold’s parent company, Canada Gold Beef Inc.
Those importers have been selling the quota rights they obtain, which places small processors like Canada Gold Beef at a competitive disadvantage.
“What it does is it puts us out of the marketplace,” said Paskal, adding that Canada Gold Beef had no choice but to stop processing premium hormone-free beef at the SunGold plant.
“I’m extremely disappointed that we had to lay people off at that plant. People’s jobs were lost because of this weakness of the trade agreement that we have.”
Last November, Canada gained duty-free access to a 21,000-tonne beef export quota into the European Union. The United States and other countries that produce beef to European standards are also able to utilize that quota.
This appeared to open the door for Canadian companies like Canada Gold Beef — until scores of applications were made for shares of the quota.
John Masswohl, director of government and international relations with the Canadian Cattlemen’s Association, described many of the applicants as “speculators” who then sell their quota rights.
In September and October, said Paskal, Canada Gold Beef’s available allotment was less than enough to fill a third of a shipping container. Yet he knows European consumers would buy much more if it was available.
“Our product that we send there is so well-received.
“The quality is second to none.”
Masswohl is sympathetic to Canada Gold Beef’s plight. He said the European Commission has admitted that a problem exists and previously pledged to address it.
“It seems apparent that their plans to resolve it didn’t work.”
Paskal is blunter in his assessment.
“The EU Commission could care less.
“What (the situation) has told us is that this is just a non-tariff way for the EU Commission not to let Canadian or American product into their countries.”
Masswohl said his association and Foreign Affairs and International Trade Canada continue to discuss the issue with the Commission.
“The bottom line is, they agreed to provide duty-free access through this quota, and the way the quota is being administered is essentially creating a de facto tariff barrier. They have an obligation not to do that.”
Canada Gold Beef has raised the issue with the federal government, but has received no response, said Paskal.
“I’m disappointed that there wasn’t more concern.”
Another exporter of beef to Europe is Prairie Heritage Beef, an association of Alberta and British Columbia ranchers.
“They’re in the same boat,” said Masswohl.
Christoph Weder, the founder of Prairie Heritage Beef, is currently in Europe and could not be reached for comment. But Werner Siegrist, a partner in Canadian Premium Meats of Lacombe — which processes Prairie Heritage Beef’s cattle — hasn’t noticed much of an impact.
“It’s definitely an issue,” he added, agreeing that any cost associated with accessing European quota would make it tougher to compete.
“Anything you add on is not going to be good.”
Canada Gold Beef was created by a group of beef producers several years ago as a way to brand their product. It acquired the Innisfail plant from Sunterra Meats Ltd. earlier this year, and invested more than $2 million to boost capacity — largely in reliance on European demand.
Now, it’s focusing on the lamb sector, said Paskal.
“We’re going to ramp up production to slaughter more lamb, process more lamb and try to make that side of the business a go.”
The plant, which has employed more than 130 people, will also continue to custom-slaughter beef and bison.
The Advocate attempted to obtain comment from the federal government but a spokesperson was not immediately available.
hrichards@www.reddeeradvocate.com