At least one farm group wants the sale of Schneider Corp. to Maple Leaf Foods blocked while another is urging that conditions be attached to protect hog producers.
Maple Leaf Foods Inc. announced last September it planned to buy Schneider Corp. for close to $515 million. However, the federal competition bureau had to review the transaction before it could be completed.
The review was still ongoing as of last week and the National Farmers Union insisted the sale should be blocked, arguing it would eliminate competition for hogs, push down prices paid to farmers and drive up prices consumers would pay for pork.
Read Also
Cattle smuggling worsens outbreak in Mexico
Cattle being smuggled across Mexio’s southern border are making a screworm outbreak much more difficult to control.
NFU youth president Dave Lewington, who raises hogs near Brussels, Ont., said the deal would not maintain even the pretext of competition.
He suggested the competition bureau’s review may be based on the faulty assumption that the United States can be considered an alternative market for Canadian hogs. The reality, he said, is that the U.S. market shouldn’t be counted on, considering the industry’s history with countervailing duties, the current experience with closed borders because of BSE and the possibility the U.S. will impose country-of-origin labelling.
If the sale is not blocked, he added, an effort should be made to restore single-desk selling of hogs. Provincial single-desk marketing systems were dismantled in the 1990s, a move that the NFU contends made it harder for smaller, independent producers to receive the same prices for hogs as larger operations aligned with packers.
“I think that’s something that needs to be looked at all across Canada,” Lewington said.
Two rather than three major companies will be slaughtering hogs on the Prairies if Maple Leaf Foods absorbs the Schneiders-owned Mitchell’s Gourmet Foods of Saskatoon.
Maple Leaf officials were hoping the purchase of Schneiders could be completed by the end of 2003 or in the first quarter of 2004. They declined comment last week, saying it would be inappropriate to do so while the matter was before federal regulators.
Manitoba Pork Council chair Marcel Hacault said his group has made four main recommendations regarding the planned sale of Schneiders:
- Greater transparency in how packers issue supply and pricing contracts to producers. Hacault said there already is a perception that some producers get preferential treatment over others.
- An assurance that if Maple Leaf closed any of its hog slaughter plants, it would be required to offer them for sale before they closed.
- An extension of Maple Leaf’s arms-length relationship with Elite Swine, its hog production component. Through Elite Swine, Maple Leaf owns hog barns and is linked with other private hog operations.
- A mechanism be put in place to prevent unions from going on strike at all Maple Leaf slaughter and processing plants at the same time. A large labour disruption of that kind could harm demand for hogs and depress prices.
Hacault said there is an underlying concern that Maple Leaf’s purchase of Schneiders could make the company’s hog slaughter and processing division attractive to a large American packer, setting the stage for those facilities to be taken over by U.S. interests.
