Container regs not a factor in ketchup plant closure, Heinz says

The plan to close a major ketchup processing plant in Canada’s tomato capital isn’t based on federal proposals to deregulate food container size standards, ketchup giant Heinz says.

The U.S. food processing firm said Thursday it will close its plant at Leamington, Ont. plus two U.S. facilities by mid-2014, to consolidate operations and eliminate excess processing capacity.

Federal politicians, including NDP leader Tom Mulcair, have since tied Heinz’s decision to plans in the 2012 federal budget that called for deregulating Canada’s food container size standards.

The government said in 2012 it would move to lift regulations that restrict sizes of containers for all processed and fresh foods, saying the regulations were “outdated and limit industry innovation and consumer choices.”

Critics of the government’s proposal have previously warned that regulation of container sizes helps protect producers against lower-priced foods being dumped into Canada in bulk sizes, and also against multinational companies supplying Canada solely from U.S. facilities.

The Heinz announcement “comes as no surprise,” Mulcair said in a statement Monday, as the Canadian standards “helped sustain these important jobs” at Leamington. The Heinz plant, he said, has “garnered Leamington the moniker of the tomato capital of Canada” and is the municipality’s biggest employer and taxpayer.

In the 2012 budget, he said Monday, the Conservative government “unilaterally altered Canada’s food container regulations… without study or consultation, but worst of all, (the changes) were made without considering the communities that would be affected.”

Ontario’s Economic Development Minister Eric Hoskins, reacting Thursday to Heinz’s announcement, said the federal decision to review regulations around standardized container sizes “has not helped the business environment and (if) implemented, could make the province less attractive” for investment.

“Level of investment”

However, when asked in an email Monday whether federal container regulations were a significant factor in the decision to close the Leamington plant, Michael Mullen, Heinz’s senior vice-president of corporate and government affairs, reiterated it was “based primarily on underutilization of capacity.”

The decision was also based, he said Monday, on “the level of investment that would be required to upgrade the aging infrastructure in a 104-year-old factory.”

Leamington, where Heinz today employs 740 people, was the site of the Heinz company’s first expansion outside the U.S., in 1909.

Ontario provincial ag critic Ernie Hardeman scoffed Monday at the suggestion container sizes were to blame for the Heinz decision, instead blaming the provincial Liberal government’s policies.

In a release Monday, Hardeman said Premier Kathleen Wynne has previously and “clearly” been told Ottawa is “not proceeding with the changes (to container regulations) because it would cost jobs.”

Asked Monday whether the proposals on food containers are no longer proceeding, federal Agriculture Minister Gerry Ritz said in an emailed statement that “no changes have been made with respect to standard container sizes. The regulations remain the same as they were last year and for many years prior.”

The government, he said, would ensure “any changes made are in the best interest of the Canadian food processing sector.” — AGCanada.com Network

Related story:
Ontario reeling as Heinz to shut major ketchup plant, Nov. 14, 2013

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