Prairie farm equipment dealers are once again facing arm-twisting tactics from main-line manufacturers, despite provincial legislation designed to prevent that from happening.
The Canada West Equipment Dealers Association says many of its members have complained about a new John Deere contract that encourages them to discontinue carrying products from smaller companies on their lots.
“They make it very clear that they want the dealer’s emphasis to be on their product and only their product,” said association executive vice-president John Schmeiser.
Association lawyers reviewed the new contract and determined it violates dealer protection legislation recently adopted by all three prairie provinces that was designed to promote competition and selection in the farm equipment industry.
Read Also
Powdery mildew can be combine fire risk
Dust from powdery mildew can cause fires in combines.
“I believe every farmer should be concerned when one manufacturer is trying to squeeze out another manufacturer,” said Schmeiser.
John Deere spokesperson Barry Nelson said a clause in the contract confirms that provincial and state legislation supersedes what’s in the document, so there should be no confusion on behalf of the dealers.
It’s written that way because not every jurisdiction has such legislation.
“We’re not going to have a contract for every province or every state we do business in,” said Nelson.
“Laws change all the time so we would be constantly trying to change contracts for every state we’re in and for every province we’re in.”
He said while the company doesn’t want competitive products from other main-line manufacturers on John Deere lots, short-line equipment is OK if John Deere has fair representation.
“Say they carry three of another brand, then we ask that they carry three of our brand,” said Nelson.
Schmeiser said that’s not what the contract states and it’s not what dealers are being told by John Deere’s territory managers.
“The main-line manufacturer is once again demanding that their dealers discontinue carrying shortline products,” he said.
New Holland attempted something similar earlier this fall with its standards program that penalized dealers for carrying competitive air seeders and tractors.
After meeting with the dealer association in October, New Holland removed those penalties, but Schmeiser is annoyed these types of incidents keep cropping up.
“Quite frankly I’m actually a little disappointed that the manufacturers have not respected the law. There still is an implied threat out there.”
Lawyers for the dealer association drafted a new agreement based on the John Deere contract that complies with provincial legislation. It is being distributed to dealers and a copy will be sent to John Deere.
Nelson indicated that document wouldn’t be well received at the equipment manufacturer’s Canadian headquarters in Grimsby, Ont.
“I’m sure we’re not going to look too kindly on that – that some dealer group that doesn’t even represent John Deere is telling us how to write a contract.”
Schmeiser said the association won’t advise dealers not to sign the new contract because it includes a volume bonus structure some may want.
But he re-emphasized that provincial laws take precedence when it comes to the clause restricting competition.
