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Smuggling Cheese, Follow the Money

That cheese is a commodity worthy of smuggling shows there are price disparities in the dairy markets.
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Joseph P. Kennedy, Sr. smuggled spirits across the Canadian–American border into the USA and pharmaceuticals from Canada looked to be a real business for awhile. Now the track is reversed with US made mozzarella being smuggled into Canada.

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.

Apparently mozzarella made in the US is cheaper than Canadian made mozzarella. But the Canadian tariffs bump up the price of US made cheese brought into the Great White North, starting the Great Cheese War between US and Canadian cheese companies.

What would cause this smuggling to occur? As always, follow the money. The Dairy Planet, a media outlet for the Canadian Restaurant and Foodservices Association, says Caught in a vortex of high dairy prices and shrinking domestic demand for its products, Canada’s dairy industry is in trouble. From the Globe and Mail comes It's time to question Canada's cheese prices; and Dairy price gap leaves lots of room for tariff cuts. And Market Watch shares this Got milk? Canadian shoppers get it at U.S. Costco.

So why smuggle cheese? Because there is a large price disparity in close geographical proximity. And where there are large price differences, the market will change, legal or not.


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