Saputo Inc. should improve its transparency with investors, as the dairy giant won’t be able to outrun falling demand for its milk and cheese products, according to the author of a critical report against the company that was published earlier this week.

“They're not giving investors enough information to discern the probability of success here, again they won't even tell you how many of their sales is from private label,” said Ben Axler, founder and chief investment officer at Spruce Point Capital Management, LLC., in an interview Wednesday.

“Private label is winning at their expense so that would clearly be information that investors need, in a vacuum of information. We think the company’s a sell, a short.”

Spruce Point released its report on Saputo on Tuesday, stating the Canadian dairy producer has overpaid for acquisitions, is becoming less transparent with financial disclosures and that the “dividend has not been covered by discretionary free cash flow.” Spruce Point also sees a 40 to 60 per cent downside in Saputo’s shares to roughly $13.75 to $20.50 a share.

Axler added that he won’t change his call for Saputo until he sees “hard facts and evidence and analysis supporting we’re wrong.”

“In the meantime, again, holistically think big picture, this is a dairy company and dairy trends are declining, and that is something that Saputo cannot outrun in the long run,” he said.

A Saputo representative wasn’t immediately available to comment on Spruce Point’s report.   In an emailed statement to Bloomberg News on Tuesday, the Montreal-based company said Spruce Point’s report is “without merit”

“Saputo is of the opinion that the report is without merit and that it contains mischaracterizations and incorrect information, which are misleading and solely intended to benefit the author,” the company told Bloomberg News.

Axler said he’s calling on Saputo to “come out and be specific” with what information they think is incorrect.

“Where are we wrong? If we're wrong, we'll correct our statements but a lot of the facts are driven directly from Saputo’s filings and also from their website,” he said.

“Again, we point out, they recently were asked about their market share in Canada and we think they dodged the question. But, look on their website, they used to describe themselves as the leading dairy producer. Now, they described themselves as a leading producer. That's a big shift.”