x Abu Dhabi, UAEWednesday 26 July 2017

Sticky questions after Canada's great maple syrup heist

The theft of six million pounds of syrup has raised concerns about the attempt in Quebec to control supply and whether its cartel can survive.

Quebec dominates the maple syrup market, and since 2002 the federation has operated as a legal cartel, setting production quotas and prices, authorising buyers, and stockpiling syrup.
Quebec dominates the maple syrup market, and since 2002 the federation has operated as a legal cartel, setting production quotas and prices, authorising buyers, and stockpiling syrup.

On July 30 last year an accountant named Michel Gauvreau arrived at the Global Strategic Maple Syrup Reserve, housed in a huge red brick warehouse on the side of the Trans-Canada Highway in Saint-Louis-de-Blandford, about two hours north-east of Montreal.

Inside, baby-blue barrels of maple syrup were stacked six high in rows hundreds deep. Full, each barrel weighs about 620 pounds. With grade A syrup trading at about US$32 per gallon, that adds up to $1,800 a barrel, about 13 times the price of crude oil.

The fiscal year was coming to a close, and the Federation of Québec Maple Syrup Producers had hired Mr Gauvreau's company, Veragrimar, to audit its inventory. Quebec dominates the maple syrup market, and since 2002 the federation has operated as a legal cartel, setting production quotas and prices, authorising buyers, and stockpiling syrup.

There were about 16,000 barrels here, about a tenth of Quebec's annual production. The gap between the rows was barely wide enough to walk through, and the rubber soles of Mr Gauvreau's steel-tip boots stuck to the sugar-coated concrete floor. He scaled a row of barrels and was nearing the top of the stack when one of them rocked with his weight. He nearly fell.

Regaining his balance, he rattled the barrel. It was light because it was empty. He soon found others that were empty. After notifying the federation's leaders and returning with them to examine the stockpile, they unscrewed the cap on a full barrel. The liquid inside was not goopy, brown, or redolent with the wintry scent of vanilla, caramel and childhood; it was thin, clear and odourless. It was water.

The federation would need two months to tally the losses to the stockpile. Sixty per cent, or 6 million pounds of syrup, had vanished, worth about $18 million wholesale. The bold and baffling heist counts as one of the largest agricultural thefts, dwarfing the 860 head of cattle snatched in Queensland last spring and the potato patches the size of a football field that were dug up in British Columbia in August.

Siphoning off and transporting so much syrup was no mean feat. It would have taken more than 100 tractor-trailers. "To steal that amount of maple syrup means you have to know the market," says Simon Trépanier, the acting director of the federation.

The theft was also an existential threat to the federation, which had viewed its growing strategic reserves as the final step in stabilising prices, locking in buyers, and ensuring loyalty from its producers. For the past decade it had struggled to overcome opposition to its reign in a series of legal battles the local media had christened "the maple wars". Some observers have suggested that their attempts to control the syrup supply had, in fact, catalysed an underground economy.

Maple syrup may not rank among Canada's most financially important agricultural exports, but the maple leaf has an iconic place in Canada's hearts. It became a national symbol featured on coins, military uniforms, and eventually the country's flag.

After the federation reported the theft to the Quebec provincial police a vast investigation began that would involve interviews with nearly 300 people in the industry, reviews of export statistics, and forensic analyses of syrup kettles, forklifts, and scales, tracing two-thirds of the stolen syrup to companies in New Brunswick, Quebec, Ontario, and the United States.

Last month, as snow blanketed the Saint-Lawrence Valley, police arrested Richard Vallières, one of Quebec's most notorious "barrel-rollers", an unauthorised middleman who had run afoul of the federation in the past and paid thousands of dollars in fines. The police charged him with conspiring with five others to commit the theft at the warehouse and sell the stolen maple syrup.

TV cameras filmed him being hauled into the courthouse in handcuffs. One member of the gang had rented space in the same warehouse, merely moving the syrup from one section of the warehouse to another and out the other loading dock. In total, 22 suspects have been charged including Etienne St. Pierre, a maple-syrup exporter who is accused of knowingly possessing and trafficking the stolen syrup.

The stolen syrup still worries law-abiding producers within the federation. "My biggest fear is that this syrup is going to hit the market, and big buyers are not going to buy our syrup," says Philippe Turcotte, a syrup producer.

The Quebec television station TVA Nouvelles reported that at least 70 lorry loads of stolen syrup have already made it to three distributors in the US, including Bascom Maple Farms in New Hampshire, one of Mr St. Pierre's clients and the largest maple supplier in the US.

There is no guarantee that the federation will get its syrup back across international boundaries.

"This is what bothers us," says Mr Trépanier, a slim technocrat who is passionate about the federation. "Everybody knows it is stolen, but nobody can do anything about it. It's incredible."

Large questions loom about whether Quebec's tightly controlled system will survive in the long term. In 2002, Quebec claimed 80 percent of world maple syrup production. In 2011, its share dropped to 71 per cent of the market as US states and Canadian provinces without quotas have risen to supply cheaper syrup, according to buyers.

* Brendan Borrell