One Quebec Cartel Calls the Shots for the World's Maple Syrup Production

(Bloomberg) -- The next time you pour a stream of golden-hued maple syrup over your pancakes consider this: odds are it was sold by a Canadian group that acts as the de facto cartel for the sticky stuff. The Quebec Maple Syrup Producers controls output and sets prices for most of global production, and even stockpiles unsold syrup in a strategic reserve it can tap in lean harvest years.

1. Who controls maple syrup?

Quebec is the world’s largest producer of maple syrup, accounting for more than 70% of global output. Farmers selling containers of 5 liters (1.3 gallons) or less to a grocery store or restaurant need to have a production quota from the government-sanctioned agency formerly known as the Federation. All bulk sales above 5 liters are sold to the agency or authorized buyer and farmers must have a quota.

2. Why is there a strategic reserve?

The time frame for maple syrup production is short and highly dependent on weather since tree sap is only able to flow when daytime temperatures alternate between freezing and thawing. To stabilize supply and prices, the Quebec agency set up a reserve in Laurierville, Quebec in 2000, a warehouse that covers the equivalent of five football fields and stores syrup in barrels. It was the scene of a notorious syrup heist uncovered in 2012.

3. Is there any pushback against this system?

The agency has brought price stability for farmers, but producers have expressed frustration with the tight controls in recent years as U.S. production expanded at a faster rate. The agency has sought to boost production limits in response and to quell black market sales.

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