Friday, December 7, 2012

Gray in spotlight on B.C. imports

Don Cayo of the Vancouver Sun is exposing large-volume imports of U.S. eggs by a company controlled by L.H. Gray and Son Ltd. of Strathroy, Ont.

But Cayo is more concerned about the conflict of interest for four directors of the British Columbia Egg Marketing Board than he is about Gray.

He says those directors stand to profit from the imports that make up for shortfalls in B.C. production.

The directors are investors in Fresh Start which, in turn, owns 49 per cent of Golden Valley, the province’s dominant egg grader. Gray owns 51 per cent.

Cayo points out that the B.C. egg board complains long and loud about people who shop for their eggs in the U.S., claiming that takes $3.2 million out of producers’ revenues.

Imports on special permits issued by the federal trade department total about 900,000 dozen in each of the last two years.

They’re bought at relatively low U.S. prices and sold at relatively high B.C. prices with Golden Valley pocketing the margin.

Cayo indicates that it’s hypocritical for the egg board leaders to complain about individuals shopping for eggs in the U.S. while their own egg-grading company is a heavy importer.

There are similar concerns about ever-increasing imports by Ontario’s egg-grading companies. Gray and Burnbrae Farms dominate in Ontario with more than 90 per cent market share roughly equally split between them.

Import volumes have set records every year for several years.

They import heavily in the period leading up to Christmas, then dump heavy volumes into the lap of farmers to dispose of in January. They profit on the imports and farmers have to cover the losses on the extras in January that are diverted to processing companies, coincidentally owned by Gray and Burnbrae.

There have been no Ontario egg board complaints about cross-border shopping and Ontario’s egg farmers don’t have ownership stakes in either Gray or Burnbrae similar to B.C. egg farmers in Golden Valley.