Canada’s Competition Bureau will not oppose the purchases of two prairie-based hog companies.
In a statement issued today, the bureau said Maple Leaf Foods’ offer for Puratone and Olymel’s offer for Big Sky Farms were not likely to lead to less competition. It didn’t issue action letters to the companies after separate investigations of the proposed vertical mergers.
“In both investigations, the bureau concluded that the mergers were unlikely to lead to a substantial lessening or prevention of competition for a number of reasons, including the inability to create or increase market power upstream due to an excess demand for hogs and the inability to create or increase market power downstream due to, among other factors, effective remaining competition,” said the statement.
It also said that Olymel and Maple Leaf would be able to harm rivals by foreclosing hog producers’ access to a sufficient customer base, but that information from both companies indicated neither would have any incentive to do so.
The costs of doing this would exceed the gains, the statement said.
