Why Some Canadian Maple Syrup Producers Are Defying Their 'Cartel'

Steve Côté has had his product confiscated. He's been under 24-hour surveillance. And he faces hundreds of thousands of dollars in fines.

Côté says you'd think he was dealing drugs. But it's maple syrup from his very own trees that has him in hot water.

In the Canadian province of Quebec, maple syrup producers are subject to the whims of the Federation of Quebec Maple Syrup Producers, a nongovernmental organization that sets production quotas and, effectively, the price of the world maple market. Nearly all commercial producers of maple syrup in Quebec must sell their product through the federation, which promises to defend their interests, keep the business lucrative and market their product.

But some maple syrup producers and buyers are chafing at the federation's strict rules and what they describe as bullying tactics. These free marketers are, in defiance, doing business outside the system, and it's landing them in court.

Côté estimates he owes CA$750,000 (about U.S. $560,000) in fines to the syrup federation because he went around it. And he says that's unfair. "We're supposed to be in a free country," he says.

Quebec produces about three-quarters of the world's maple syrup supply. "There's pride, and maybe a little bit of nationalism, associated with it," says Antoine Aylwin, a Canadian lawyer who represents maple syrup buyers who've also tangled with the federation.

The federation, which has been called a "government-sanctioned cartel" by the New York Times and others, has more than 7,500 members today. It was created 50 years ago by producers who wanted to try and control wildly fluctuating maple syrup prices. In 2004, after a vote from its members, the federation established its current quota system. Those who produce over the quota must send their extra syrup to a Fort Knox-like storage facility — the strategic reserve — where it sits until the group needs to tap it in a low-yield year.

"That's a system that many producers have a problem with. They would rather produce by themselves, sell by themselves and not report to the federation," Aylwin says.

Côté has been butting heads with the federation for nearly a decade, since he bought his father's sugar bush in 2006. The conflict boiled over in 2013, when authorities rolled up to his sugar shack and lugged away more than 100 maple syrup drums, worth about CA$125,000, amid allegations he produced and marketed his product outside the system. The federation has seized some of his product each year since and has deployed guards to his property to monitor his production. And it's taken a heavy toll on him. "Financially, it's getting harder and harder," he says.

Federation spokeswoman Caroline Cyr says disgruntled members like Côté are the minority. The organization received a 75 percent approval rating in a survey it administered to its members this year, up 4 percentage points from the year before, she says. And, she argues, the federation isn't anything like a cartel.

"All our decisions are voted on [by members]," she says. "It's democracy, and we don't think that a democracy can be a cartel."

Still, the federation hasn't hesitated to go after others in the supply chain who cross it. Etienne St-Pierre, a syrup exporter in New Brunswick, says he has been summoned to court 32 times for charges associated with purchasing maple syrup outside the system.

He says he can entice Quebec producers to sell with him because he can pay more immediately for their stock — and he doesn't care about the quotas.

St-Pierre found himself in the crosshairs of the federation after a heist at the group's reserve in 2012, where thieves made off with more than CA$30 million worth of syrup. The federation alleged St-Pierre was involved and seized CA$1.6 million in syrup from his store. But St-Pierre maintains he had nothing to do with the theft.

"They're trying to ruin me," says St-Pierre, who will face the federation in court again in November.

But according to Sylvain Charlebois, a professor of food distribution and policy at Ontario's University of Guelph, many in the industry aren't sympathetic to producers and buyers like St-Pierre fighting the federation.

"Some may actually consider them heroes," Charlebois says. "But I would say the majority of members would consider them betrayers — they betrayed the system and betrayed the camaraderie of producers ... It goes deep into the roots of rural Quebec."

Still, Charlebois has argued that the system has to change. The federation's quotas limit producers' ability to expand, and they ultimately hurt Quebec's standing on the world maple market, he says. (He notes these concerns have prompted Quebec's agriculture minister to call for a study of the federation and future of the industry.)

"They're actually creating their own enemy," says Charlebois. "They're creating their own competition to protect themselves."

The biggest competitor these days? The U.S. According to Tim Perkins, a research professor and director of University of Vermont's Proctor Maple Research Center, high, stable prices along with favorable exchange rates have lured more producers — some Canadian, but mostly American — into the U.S. maple market. It's expanding about 10 percent each year, he says.

But if you think that means the sugary for your pancakes will be getting cheaper, don't get your hopes up. A 8.5-ounce jug of maple syrup is still about $8, and will stay that way, if the federation has anything to say about it.

Whitney Blair Wyckoff is a writer and editor in Washington, D.C.