The federal Competition Bureau has found no evidence of an agreement between Canadian crop input suppliers to freeze out a new competitor.
The bureau launched a formal inquiry in October 2019 to investigate a complaint filed by Farmers Business Network (FBN), an online retailer of crop inputs whose members farm more than 80 million acres in the United States, Canada and Australia.
FBN entered the Canadian marketplace in November 2017, giving members access to a digital platform for buying crop inputs, data analytics tools and price comparisons and agronomic information.
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The company was unsuccessful in its attempts to source inputs from manufacturers and wholesalers operating in Western Canada, so in March 2018 it bought Yorkton Distributors Ltd., a brick-and-mortar independent retailer operating in southern Saskatchewan.
Yorkton Distributors had pre-existing relationships with many manufacturers and wholesalers of brand name crop inputs.
FBN alleged that following that acquisition those manufacturers and wholesalers refused to supply Yorkton Distributors or restricted supply by denying FBN access to their rebate programs.
The bureau investigation concluded that while there was communication among market participants with the goal of influencing FBN’s suppliers, there was no evidence that any agreement existed between the competitors.
“The bureau is not of the view that the evidence at this time demonstrates the targets’ conduct resulted in a substantial lessening or prevention of competition in one or more markets for crop inputs in Western Canada,” it said in a statement.
“However, the evidence gathered did establish that many market participants considered FBN as a market disruptor and competitive threat to the incumbents due to its innovative business model.”
The bureau said it views the communications that took place in the highly concentrated crop input sector to be a “significant concern” and warned that it will monitor the industry.
“Firms should be aware that similar communications could create agreements that contravene the civil or criminal conspiracy provisions of the Competition Act, depending on their terms,” stated the bureau.
FBN sees the ruling as a partial victory.
“We hope the bureau’s clear findings will help ensure a competitive landscape remains available for Canadian farmers,” company co-founder Charles Baron said in a news release.
