An attempt to overturn Canadian federal rules on cheese ingredients has ended in failure for two major producers after the country's top court refused to hear an appeal by Saputo and Kraft.
The rules require cheese makers to use more full-fat milk and less of the ingredients typically labelled as milk solids.
The companies argued the rules would boost their costs, raise prices for consumers and threaten cheese-making in Canada.
The Supreme Court of Canada gave no reason for its deciding against hearing the appeal launched by Montreal-based Saputo Inc. and American multinational Kraft Foods Inc.
"We respect the Supreme Court's decision and we have been fully compliant with the cheese regulations since they came into effect in December, 2008," Saputo spokesman Craig Segal said.
Saputo, Canada's largest cheese producer, didn't know the magnitude of the legal costs it will be forced to pay.
Kraft couldn't be reached to comment because of the U.S. Thanksgiving holiday.
The cheese makers objected to the government's decision to establish minimum use of liquid milk, something that benefits dairy farmers, but which raises the costs for cheese processors.
The Federal Court of Appeal had dismissed the companies' objections to rules regarding the content of both domestic and imported cheese.
The changes under the Food and Drugs Act and Agricultural Products Act were announced in 2007.
Justice Robert Mainville of the Federal Court of Appeal found little substance in the arguments put forward by the companies in their earlier appeal.
The appeals court judge said technological advances in cheese making have reduced the use of liquid milk, allowing processors to achieve higher yields and economic savings while affecting the taste, texture and consistency of cheese.
Judge Mainville also found that the original judge didn't err in finding that the federal government had the jurisdiction to enact regulations under the federal trade and commerce power.