Why Does Canada Have a Maple-Syrup Cartel?

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Over a one-year period during 2011 and ’12, some 6 million gallons of maple syrup — about $18 million worth — were stolen from the “strategic maple syrup reserve” controlled by the Federation of Quebec Maple Syrup Producers (FPAQ). The cartel’s syrup was taken from a St.-Louis-de-Blandford warehouse, which some clever thieves had access to because they just so happened to be renting another section of the same storage facility. Last week, three men were arrested in connection with the heist.

(MORE: Sticky Situation: $30 Million in Maple Syrup Stolen from Canada’s Strategic Syrup Reserve)

It may seem bizarre that Canada has a maple-syrup cartel at all. But think of it this way: Quebec, which produces about 77% of the world’s maple syrup, is the Saudi Arabia of the sweet, sticky stuff, and the FPAQ is its OPEC. The stated goal of the cartel, in this case, is keeping prices relatively stable.

The problem with maple syrup is that the natural supply of it varies dramatically from year to year. “It’s highly dependent on the weather,” explains Pascal Thériault, an agricultural economist at McGill University in Montreal.

(MORE: A Brief History of Maple Syrup)

“The maple trees need optimal climate conditions — cold nights, temperate days — to produce the right sap,” explained a recent article in the Washington Post. “That doesn’t always happen, and production varies sharply each spring.”

Demand is also irregular, added the Post: “During recessions, many families cut way back on syrup purchases, since it’s not exactly essential.”

So since 1989, the FPAQ has modulated supply to keep prices stable, setting aside maple syrup in good years and releasing it in bad ones. Thériault says relatively little maple syrup was produced from 2005 through ’08. But from 2009 through ’12, the syrup flowed fast and sweet, filling warehouse with reserves and setting the stage for the maple-syrup heist.

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Does the maple-syrup reserve keep prices artificially high? In good years, yes. A supply-management system like the one in Quebec will keep prices stable no matter what supply is like. But when Canada isn’t producing as much maple syrup, the cartel kept prices lower than would otherwise be the case.

The system seems to have helped producers, who would no doubt be the ones most heavily affected without the reserve, says Thériault. It’s a different story for consumers, who don’t get to take advantage of years of syrup surplus. Considering the stranglehold Quebec has on the global market, that’s not likely to change anytime soon.

MORE: Syrup Shortage: Warm Weather Has Led to ‘Yucky’ Maple Syrup