Establishment of a Diary Products Subsidiary in Canada

The processed food in shortest supply in Cuba is canned milk. The Carnation Company, headquartered in Los Angeles, is particularly well suited to establish a Canadian subsidiary for the purpose of producing canned milk products for export to Cuba. Canadian raw milk production is more than sufficient to support such an operation.

Cuba does not have a strong dairy industry. Canada, by contrast has an excess supply of dairy products, with respect to domestic consumption demand. The Carnation Company has, over a period of almost 100 years, developed a particular expertise in the processing canned milk. A Carnation subsidiary located in Canada, thus, would hold a comparative advantage of some significance in the context of exporting canned milk products to Cuba.

The product line for export to Cuba from a Carnation Canadian subsidiary would not be restricted to canned whole milk. The product line would also include evaporated milk, condensed milk, condensed sweetened milk, and baby formula products.

The mode of participation for Carnation in Canada would be the direct foreign investment in a whollyowned subsidiary. Such a subsidiary would be under the direct control of Carnation, but would be subject to the export laws of Canada, as opposed to those of the United States. Political/Legal Environment

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English speaking Canadians, on the one hand, and Canada's native peoples and the federal and provincial governments, on the other hand, however, cause the prospects for the development of a single Canadian identity in the 1990s to appear dim indeed. The general approach to society by Canadians differs from that of Americans. This fact may be illustrated through a consideration of health care. In Canada, health care costs have also been rising. Even with universal health care, and with health care quality at least as high as that in the United States, however, health care costs in Canada consume less than sevenpercent of that country's gross national product, compared to more than 10 percent in the United States (Statistics Canada, 1991). In Canada, a national health care insurance system is in force. In fact, of all of the industrialized countries in the world, only the United States and the Republic of South Africa are without such systems. Health care delivery in Canada is a provincial responsibility; however, the funding for the system is shared by the provinces and the federal government, with the federal government making the largest contribution in each province. Fee schedules are established by the provincial gove
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Approximate Word count = 4086
Approximate Pages = 16 (250 words per page)