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Minute Maid's lactose-free milk shut out of New Brunswick

Coca-Cola subsidiary Minute Maid is seeking another chance to get its high-protein, low-sugar milk products into New Brunswick stores.

The company's bid for a milk-dealer licence for its Fairlife brand of "ultrafiltered" lactose-free milk was rejected in December by the New Brunswick Farm Products Commission.

The commission concluded that introducing Fairlife into the New Brunswick market was not in the best interest of the public or the dairy trade, according to a brief rejection letter filed in the Court of Queens Bench in Saint John.

"Further fragmentation of New Brunswick's fluid milk market by milk originating out of the country displaces New Brunswick dairy farmers' milk and threatens current local fluid milk processors' already precarious presence in the province," wrote commission chair Robert Shannon in a letter dated Dec. 14, 2018.

Minute Maid says it's only importing milk from Michigan until its $85 million processing plant under construction in Peterborough, Ont., is ready for production in 2020.

Then it will use Ontario milk to supply the rest of Canada.

'Unfair procedures'

Minute Maid has filed an application to the court to have the commission's decision quashed.

The company's main complaint is that it was denied access to the arguments against its application at hearings back in September.

Minute Maid said its representatives were not allowed to be present when competitors Agropur and Saputo, both based in Quebec, intervened.

The company also claims that it was denied any record of what was said and was therefore denied its right to reply and that it never knew the case it had to meet.

"The Commission committed a breach of the rules of natural justice and the duty of procedural fairness owed to Minute Maid by failing to issue reasons that were sufficient at law or that met the threshold of intelligibility required at law," wrote Saint John lawyer Matthew Letson.

No comment

The Farm Products Commission says it's not obligated to file its decisions anywhere that is accessible to the public.

The commission also declined to make anyone available for an interview.

The New Brunswick Dairy Farmers declined to comment on the story because of the court case and referred CBC to the Dairy Farmers of Ontario.

Coca-Cola
Coca-Cola

The Ontario group said it welcomed Fairlife into the Canadian market because it believes the company is creating more demand for milk.

Spokesperson Murray Sherk said this will benefit any producer within the Eastern Canadian milk pool.

By agreement, Sherk said, producers within that pool share in overall revenues.

Those members include Ontario, Quebec, Nova Scotia, Prince Edward Island and New Brunswick.

Premium product

At a suggested retail price of $4.99 for a 1.5-litre container, Fairlife milk sells at a premium price.

In comparison, a two-litre container of milk in New Brunswick costs around $3.59.

Minute Maid Canada said the product is luring former milk drinkers back to dairy.

General manager Fran Mulhern said research in the U.S. market shows about 40 per cent of Fairlife customers are "coming back into dairy that have left it for a reason."

"They may have left it because they can't find a suitable lactose-free or they may have left it looking for more of a plant-based product."

Mulhern said Minute Maid has applied to distribute Fairlife in Nova Scotia and Newfoundland and Labrador but has yet to hear an answer.

She said Fairlife is approved for sale in Quebec, Ontario, Manitoba, Saskachewan, Alberta and B.C.

The court will hear Minute Maid's application for a judicial review of the commission's decision in a full-day hearing scheduled for May 10.