The National Farmers Union, expressing worry about a proposed merger between Agricore and United Grain Growers, has asked the Competition Bureau to block the deal.
“We foresee a dramatic consolidation in the grain handling system to the point where it’s controlled by, at the most, three or four companies,” said NFU executive secretary Darrin Qualman.
He said this merger is a “textbook case” of two large companies merging and reducing competition for farmers, and the bureau needs to look hard at how it will affect farmers.
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“We expect the competition bureau to really do their job. This raises every major issue that the Competition Bureau is designed to deal with.”
The Competition Bureau not only needs to look at the proposed merger, but also the financial health of other companies like Saskatchewan Wheat Pool and if they will be in the picture in the next few years.
“They need to look at in a holistic way.”
Richard Taylor, assistant deputy commissioner with the Competition Bureau’s mergers branch, said the bureau will look through information supplied by Agricore and UGG, and talk to customers, competitors and suppliers to try and discover the merger’s impact on consumers.
They will also talk to accountants, grain industry and terminal elevator experts, and farm groups, he said.
“We will make an assessment of whether the merger is likely to lessen competition substantially.”
He said the bureau becomes concerned if a merger will control more than 35 percent of the market.
When UGG and Agricore announced the merger, they said the new Agricore United would have 40 percent of the grain business.
Meanwhile, an Alberta farmer is frustrated that the Competition Bureau is treating the public merger of Agricore and United Grain Growers, which will affect thousands of farmers, like a private affair.
Cliff Westby said he has been met by a wall of silence whenever he phones the Competition Bureau with concerns about the merger.
“Everything is confidential,” said Westby of Camrose, even a question about what the bureau is considering in its merger investigation.
“It’s probably the most frustrating type of communication I’ve ever had with any government office,” he said.
He said he can’t understand how fewer grain companies will benefit farmers, or see how a secret merger inquiry can give farmers confidence their interests were considered.
“My contention is the competition bureau operates in secret, makes decisions in secret. There is no counterbalance or checks to know if they are considering the items that are pertinent.”
Taylor said confidentiality is key to getting good information, which the bureau requires to make sound decisions.
