Canada cheese makers challenge new dairy rules

Tue Oct 21, 2008 11:59am EDT
 
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WINNIPEG, Manitoba (Reuters) - Three large cheese makers say they have filed a legal challenge of new Canadian regulations they say will force them to use more expensive dairy ingredients, raising production costs and retail prices.

Saputo Inc, Canada's largest cheese maker, and the Canadian divisions of Kraft Foods Inc and Parmalat, said the regulations would limit their use of modified milk or dairy ingredients and require them to use more full-fat milk. That would increase returns for Canadian dairy farmers but boost cheese prices.

The cheese producers said in a release that the new rules could hurt cheese sales because of the higher prices, and may also contravene Canada's international trade obligations.

The companies filed the challenge in Federal Court on Monday.

(Reporting by Roberta Rampton; editing by Rob Wilson)