Saputo Dairy claims 2017 shipment of iodine-tainted raw milk indicative of ‘limitations’ of provincial milk marketing system

BIV's lawsuit of the week

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Saputo Dairy Products Canada is suing the British Columbia Milk Marketing Board and Grace-Mar Farms Ltd., claiming a 2017 shipment of raw milk contaminated with iodine tainted its general milk supply and caused more than $430,000 in losses.

Saputo filed a notice of civil claim in BC Supreme Court on September 11. The company claims it’s at the mercy of the BC Milk Marketing Board because vendors are required to buy their milk from the board, giving it the dual role of being “both regulator and market intermediary.” 

“The success of Saputo’s business was, at all material times, dependent on, among other things, vigilantly protecting its reputation as a manufacturer, marketer, supplier and distributor of high-quality dairy products, which in turn required that its dairy products be made with high-quality milk produced in compliance with all applicable health and other laws and regulations,” the claim states.

Saputo claims that “limitations and constraints” under the milk marketing board’s statutory scheme make it impractical for “processors to conduct comprehensive testing to verify with full certainty at the time of delivery that milk provided by the Board is not contaminated or adulterated.” 

From October to November 2017, Saputo claims, it received shipments of raw milk from the board to its Abbotsford and Burnaby facilities, but the company was “unaware of the identity of the producer of the raw milk.” But after introducing the raw milk into its production process, tests allegedly revealed that it was tainted by iodine.

Saputo claims that 146,579 litres of milk were affected at its Burnaby location, and 160,888 litres at its Abbotsford facility. The company claims it suffered losses of $431,219, a total that includes product losses of 320 totes of cheese, in addition to storage, disposal and labour expenses.

Saputo seeks unspecified damages for breach of contract, and neither Grace-Mar nor the BC Milk Marketing Board had responded to the claim by press time.