The Canadian meat packing industry has nothing to fear if the federal Competition Bureau decides to investigate packer pricing practices in the aftermath of the BSE crisis, says a senior industry representative.
Last week, the House of Commons agriculture committee formally called for a Competition Bureau investigation of why prices paid to farmers plunged after May 20 while prices charged by processors and paid at retail level by consumers did not fall nearly as far or as fast.
Agriculture minister Lyle Vanclief said he would be interested in the results of an investigation, even though he was not pushing for it.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
“If there’s an investigation, if the competition bureau believes there should be an investigation, I would find like a lot of others that investigation very interesting,” Vanclief said Nov. 7.
The committee said it “believes that a specific beef processing sector should not profit unduly from a crisis that is seriously affecting Canadian cattle farmers, especially when the entire sector is receiving government aid.”
Canadian Meat Council president Robert Weaver said in a Nov. 10 interview that the packers are convinced they have done nothing wrong in the months since a case of bovine spongiform encephalopathy was discovered in Alberta.
“As the meat council, we don’t get involved in pricing and marketing issues in an organized way,” he said from the Ottawa office of the packing industry’s national voice.
“However, I can say that they (the packing companies) claim they’re not really concerned about having an investigation into their actions by the competition bureau. They believe they have acted properly.”
Weaver noted that he once appeared before the agriculture committee to answer questions. Individual packers also attended the committee during the summer to explain costs. In the early weeks after the May 20 announcement, cattle kills were far lower than capacity, leading to packer losses.
Last week, Commons committee chair Paul Steckle and five committee members committee vowed to send a letter to the Competition Bureau to trigger a review.
An official from the Competition Bureau of Industry Canada said Nov. 10 that once a letter of complaint is received, bureau staff will look at existing public evidence to decide if it is likely an offence occurred against Canada’s competition legislation.
“If, after reviewing the public evidence, there is evidence of an offence, a inquiry can be started” with the power to subpeona witnesses and relevant internal documents.
There is no “typical” timeline for action or a decision. The inquiry, if one happens, would be conducted in private.
Vanclief said he had “no problem” with MP agitation for an investigation. “If they want to do it, I say go for it.”
He said a number of factors, including supply and demand for specific cuts, help determine prices paid by both packers and consumers.
Then, the minister leveled some of his own criticism at the packing industry, accusing it of dropping prices paid for cull cattle in late October when it heard rumours that governments could be paying out up to $200 million to top up what producers receive for their cull cows sold for slaughter.
He said it appeared that packers were trying to “take advantage” of a government program that was designed to help farmers.
