The American-owned food giant Archer Daniels Midland Co. last week extended its majority control of Canada’s flour milling industry when it completed purchase of mills owned by Maple Leaf Mills Inc.
It now controls an estimated 75 percent of Canada’s flour milling capacity.
The ADM Agri-Industries Ltd. purchase includes a mill in Calgary, a mill in Ontario and two in Montreal owned by Maple Leaf Foods and ConAgra Inc.
Under orders of the federal Competition Bureau, ADM will have to sell one of its Montreal mills to allow for competition in Quebec and Atlantic Canada.
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The Competition Bureau ruled Feb. 28 that the year-old purchase offer could go ahead. It said the swallowing of Canada’s second largest milling company by the largest would not unduly erode competition.
Competition not hampered
The bureau “did not find that the merger would substantially lessen or prevent competition in Western Canada, in part due to planned or actual expansion by other flour mills in this market,” said the announcement of approval.
Still, once the final details of the sale were announced March 4, several farm constituency MPs from across party lines said they were uneasy about the deal. They also conceded there are few public policy tools left to slow down the concentration of market power, as long as it stays within competition rules.
Saskatchewan Reform MP Elwin Hermanson said the troubling issue is concentration of corporate power. “Any time you end up with little or no competition, whether it is with meat packers, railways or flour mills, it is a real concern.”
He said market forces make it difficult for smaller community mills to compete. “So you end up with a concentration of industry.”
Liberal MP Wayne Easter, a member of the nationalist Council of Canadians, said he is uneasy both about the concentration and about the growing dominance of American ownership.
“I personally believe that a higher level of foreign ownership in any industry in our country is worrisome,” he said. “This will have to be watched very very closely.”
Saskatchewan New Democrat MP Len Taylor said the government should have a policy to encourage Canadian investment in the growing value-added sector. “I am bothered by the growing concentration of American capital and I believe it generates fewer jobs in Canada and sees fewer dollars circulating in Canada than if the money was Canadian and the profits stayed here.”
Along with the sale of Canadian milling assets, Maple Leaf Foods Inc. also has sold mills in Barbados and Belize to a subsidiary of ADM during the past year.
It is part of a company re-orientation since Maple Leaf Foods was purchased in 1995 by the Wallace McCain family of New Brunswick, in partnership with the Ontario Teachers’ Pension Plan Board.
Maple Leaf Foods said last week its shareholders shared $32.6 million in proceeds from the Canadian mill sales.
