What's driving the underground trade?

Petr Josek Snr/Reuters

The United States may be grappling with the effects of the Mexican drug war, but Canada has a rather different south-of-the-border problem: an unstoppable deluge of smuggled cheese -- and apparently, the criminal elements involved even include Canadian police officers:

CBC News has learned from numerous police sources that charges are expected soon against a few officers who are alleged to have been involved in the movement of caseloads of cheese from the U.S. to sell to Canadian pizzerias and restaurants. The alleged scam involves jamming cases of "brick" cheese -- used as a common pizza topping -- into their vehicles to smuggle across the border. With U.S. cheese being as little as a third the price it is in Canada, drivers are making $1,000 to $2,000 a trip, according to numerous sources.

Pizzerias in Canada can buy up to $100,000 of cheese a year. If that sounds like a lot, it isn't. Canadian dairy farmers are heavily protected because they're less competitive compared to, say, U.S. producers. To help these groups out, a spokesperson for the International Dairy Foods Association told me, Ottawa puts a 200 percent to 300 percent markup on imported cheese products. At the retail level, that can mean grocery shoppers in Montreal will pay as much as CDN$6.99 for the same 300-gram block of cheddar that might cost residents of Washington, D.C. half as much. A $10 French cheese might be hit by nearly $25 in fees. American producers benefit from other advantages as well, including steep subsidies that Canadian dairy producers don't enjoy.

Canada isn't alone in its high demand for cheese. Worldwide, cheese products are the number-one most shoplifted foodstuff, according to a report by the Britain-based Centre for Retail Research. Just over 3 percent of global cheese inventory gets pilfered from stores every year, the study found. In fact, cheese theft is even more of a problem than for meat, candy, or liquor.

Centre for Retail Research





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