July 29 2014 |Written By bluefish

The Battle Over Milk Packing in Canada

By Staci Cretu, Marketing Communications Manager

In a recent article published on thestar.com, staff reporter Brian Platt reports on the battle between the dairy farmer and manufacturer over whether consumers should be able to buy 3 liters of milk in grocery stores. This dispute began when one convenience store was given permission to sell 3-liter plastic milk jugs. Westfalia's Fred Beer explains the potential implications on Canada's dairy industry if 3-liter jugs are approved for sale.

On the surface, this might sound like a good idea to market and sell 3 liter milk jugs. However, in the standard plastic dairy cases this means transporting 12 liters per case versus 16 liters. Of course if they change the shape (taller and smaller X-section in jugs) and try to pack more units per case, they will require a new case packing line. In addition, blow molding companies will need to add a complete new set of molds. Combined with the added transportation costs and higher container (mold) costs, it is unlikely to result in savings for the consumer.

Four liters of milk can cost in excess of $7.00 in many regions of Canada. When you compare that to $2.50 per U.S. gallon in some U.S. border cities, it is easy to see why cross-border shopping is alive and well.

Dairy farmers are concerned that customers who purchased a 4 liter jug of milk may switch to a 3 liter jug and consume less milk. This is the exact argument used when Canada switched to metric units. Milk was sold in 3 imperial gallon size, and when the metric system was introduced, the industry went to 4 liters versus 3 liters.

Would you agree with Fred's viewpoint or should Canada have no restrictions on container type or retailer?

Milk

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