Three counties in the Greater Lehigh Valley – Berks, Lehigh and Northampton – long have been valued as a mecca for food and beverage manufacturing.

The region is close to major distribution corridors and has a large workforce and available land and infrastructure – all key reasons why the Greater Lehigh Valley often is cited as a top market for the sector. And it shows considerable growth potential.

But could this growth be thwarted by increasing competition from Canada?

It’s a threat that could prompt many new and longtime food and beverage manufacturers in the region to halt expansion plans or even move operations to north of the border, one analyst said.

Either scenario could become increasingly likely, according to a report issued by The Boyd Co. Inc., a Princeton, N.J., location consulting firm.

“A major theme of this study is increased competition from Canada,” said John Boyd Jr., principal of The Boyd Co. “Economic development professionals here don’t understand how much they are competing with Ontario.”

Canada, particularly the east Ontario region, is emerging as a fast-growing food and beverage manufacturing hotbed with lower business-operating costs and other dynamics that could lure companies from the Greater Lehigh Valley and elsewhere, according to the report. Those factors include:

  • Record low exchange rates.
  • Low sugar prices in Canada.
  • Low corporate income tax in Canada.
  • Abundance of free trade agreements in Canada.
  • Added compliance costs in the U.S. because of a revamped Food Safety and Modernization Act.

However, economic development officials in the Greater Lehigh Valley dispute Boyd’s notion, saying food and beverage manufacturing in the region is strong and continues to grow – including facilities that recently have upgraded. Plus, officials said they have yet to see any competitive pressure from Canada.

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