Identity Crisis

Spent fowl meat is a byproduct of the egg and hatchery industries. After about 60 weeks, the egg production of laying hens declines, and they are taken out of production and processed for their meat, which is usually used to make further-processed foods. Although spent fowl meat processing is an important source of economic activity in some parts of Canada, its potential use as a front to import regular broiler chicken meat without import quota is causing headaches for the broiler industry.

The Good
Canadian spent fowl meat production provides about one quarter of Canadian demand, and the rest must therefore be imported, says Robert de Valk, general manager at the Further Poultry Processors Association of Canada (FPPAC). “We’ve worked hard to find uses for this byproduct meat,” he says, “due to our success, we are exporting fowl meat products to 34 countries.”

Chicken products made using spent fowl meat are usually less expensive than broiler meat, de Valk notes. “It’s used to provide consumers and restaurants with lower-cost nuggets and patties. It has a legitimate and important place in the Canadian market.”

The Bad
The problem arises because there seems to be collective agreement that broiler meat, mostly from the U.S, is being imported into Canada under the guise of being meat derived from spent fowl.

Importing regular chicken meat as spent fowl is lucrative because the cost of the import permit is avoided, allowing cheaper, imported “spent fowl” meat to be legally sold on the Canadian chicken market, de Valk explains – thus, it is undercutting Canadian wholesale chicken prices.

De Valk adds, “Ironically, having a strong spent fowl meat product market –  availability of lower-priced chicken products – is one of the reasons supply management has been able to last as long as it has in Canada, significantly longer than it has in its current form in other countries, because consumer demand for lower-priced chicken products is met.”

The Chicken Farmers of Canada (CFC) 2012 Annual Report states that in 2012, spent fowl meat imports were 28 per cent higher than in 2011, but de Valk says the increase has slowed down this year, likely because the issue has become public. He notes that illegal spent fowl meat is often marketed to unsuspecting small provincial processing plants and restaurants. “Our members are likely the biggest users of imported chicken meat, including fowl, and have always followed the applicable rules,” says de Valk.

The Accurate?
Mike Dungate, CFC executive director, says that significant imports of broiler chicken meat are being mislabelled as spent fowl products in order to avoid import controls, and this is having a very large impact on chicken farmers and on the economy of Canada. “This year so far, Canada has imported 112 per cent of the entire U.S. production of spent fowl,” he explains. “For this to all be spent fowl meat is completely impossible, as it would assume that no spent fowl meat is being used in the U.S. for various products. And if we just count the 12 per cent, that represents $66 million in lost import taxes to our country’s coffers.”

Because the issue has been paid attention to, Dungate says the smugglers are becoming inventive and perhaps blending the meat with shipments containing no more than 49 per cent broiler meat. And imports of spent fowl currently equate to 10 per cent of Canadian chicken production.

Dungate also points to a report from the Guelph, Ont.-based George Morris Centre (GMC) that says this results in 8,900 fewer jobs being created in Canada and a $591 million lower contribution by Canadian chicken farmers and processors to Canada’s GDP per year.

De Valk counters that GMC’s loss estimates are taken from calculations that he does not see as realistic. “These calculations of losses assume that if consumers were presented with cheaper products such as nuggets labelled as containing spent fowl meat, they would automatically choose to buy the broiler meat ones, but that’s not necessarily true,” he states. Moreover, he says spent fowl meat activity creates just as much economic activity and jobs at the further processing level as broiler chicken meat, another point, he says, that the authors of the GMC report glossed over.

What to Do
De Valk reports that all poultry industry groups in Canada and the pertinent ones in the U.S. are working to stop shipments of broiler meat that are coming into Canada as spent fowl. These efforts also involve regulatory elements such as the U.S. Department of Agriculture (USDA), the Canada Border Services Agency (CBSA), as well as the Canadian Food Inspection Agency (CFIA). While genetic testing is not an option because layers and broilers are the same species, Dungate says CFC is supporting research into ways spent fowl meat and broiler meat can be distinguished.

 In terms of what CFC sees as a solution, Dungate states that firstly, the CFIA must implement a mandatory certification process. “Secondly, the CBSA must classify blended products as chicken because there is no test to distinguish spent fowl [meat] from broiler [chicken meat], and the blended content cannot be verified,” Dungate explains. “Thirdly, the CFIA must require truth in labelling to inform consumers; spent fowl is not chicken and carries egg allergy risks. Consumers do not know if they are buying spent fowl because it is all labelled as chicken. As my chairman says: if it’s not ‘chicken’ at the border how can it be ‘chicken’ in the grocery store.”

He also notes that recent survey results undertaken by Leger Marketing show that 74 per cent of Canadians want spent fowl to be clearly labelled.

To Label or Not to Label 
“We understand that processors and importers are not in favour of consumer labelling of spent fowl. It’s fine in the eyes of chicken farmers to not have spent fowl labelled as such for consumers as long as it is labelled as chicken when it comes across the border,” Dungate says. “There is a tariff rate quota system in Canada wherein all chicken imports up to 7.5 per cent of Canadian chicken production are duty-free, but the over-quota tariff beyond that point is prohibitive. But there’s a problem for if we don’t label spent fowl that can affect consumers and the entire industry.”

Labelling isn’t a solution in de Valk’s view for several reasons. “It distorts the issue. Yes, if consumers are offered more information, they will always say yes, but to say that labelling will stop the illegal chicken imports is misleading.”

All Agree it’s Illegal 
De Valk continues, “No one wants illegal activity. We need to focus on stopping illegal chicken imports, and not using this issue as an excuse to push for labelling and make spent fowl meat look inferior to consumers. CFC is using this as an opportunity to try and do exactly that, to try and make it seem to consumers that they must pay the price for ‘real chicken.’ But spent fowl meat is chicken meat.

Dungate adds, “CFC has been contacted by the USA Poultry and Egg Export Council and is aware there have been meetings on certification to which CFC has not been invited,” he says. “We do sincerely hope that processors and further processors are pursuing real certification that will stamp out this illegal activity and are not engaged in setting up a paper exercise that looks good but does not have any actual impact.”