Hog industry makes waves
In 1995, when Wallace McCain bought Maple Leaf Foods, who predicted the whole pork industry would be in tumult in just two years?
McCain’s Maple Leaf Foods seems to be at the forefront of so much activity in the hog packing sector.
There is the labor-management dispute over competitive labor costs that has closed several Maple Leaf plants across the country.
Meanwhile, the people of Brandon, Man., are celebrating their good luck at being selected as the home of Maple Leaf’s new $112 million pork plant.
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And Maple Leaf is making a hostile take-over bid for Schneider.
Maple Leaf is making waves, but it is just the most visible part of an industry reorganization that began a few years ago.
After years of neglect, all the major surviving companies are reorganizing their facilities and investing heavily for two reasons.
The end of grain transportation subsidies and the resulting need to find domestic demand for feedgrains, and increasing demand for pork in Asia.
The situation is reminiscent of the beef packing industry in the late 1980s and early ’90s. Again, an industry with aging, neglected plants and relatively high-cost labor was shaken.
Cargill Canada, wholly owned by its American parent, was the instigator when it built its huge High River, Alta. plant and got a favorable first contract from its workforce, many of whom were recent immigrants.
Labor costs at other plants had to fall into line. Older plants in Ontario and Manitoba closed. The Burns meat empire toppled and was eventually bought by McCain after he, with the backing of the Ontario Teachers Federation pension fund, bought Maple Leaf.
Lakeside Packers in Brooks, Alta., was bought by another American giant, IBP, which invested heavily to make it a rival of the Cargill plant.
So history repeats itself. But in the case of pork, it is a Canadian company at the forefront of change.
And with McCain and his son Michael heading the company, there is expectation that Maple Leaf can be successful internationally, just as it was with french fries and frozen juices before brothers Wallace and Harrison split, leaving Harrison with the McCain Foods business.
One wonders what would happen if the brothers, each with businesses generating multibillion dollar sales, ever reunited.
Though still not in the same league as Nestle or General Foods, it would be a leviathan on the Canadian food scene.
