As large farm equipment manufacturers consolidate and reduce the number of competitors in the industry, some prairie dealers are under pressure to toe the company line, or else.
One Saskatchewan farm equipment dealer, who didn’t want his name used for fear of reprisals from the New Holland head office, said he was forced to split his company to continue offering short-line equipment built by a smaller manufacturer.
Now he competes against his former partner across the street.
John Schmeiser, executive vice-president of Canada West Equipment Dealers Association, an umbrella group representing 421 agriculture and industrial dealers in the West, said other dealers have tried similar tactics.
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When New Holland bought part of Saskatchewan-based Flexi-Coil earlier this year, New Holland dealers began making room for that line. That has sparked some jostling among dealers.
Ken Kay, of AgLand Equipment in Lloydminster, said Flexi-Coil announced it would no longer stay with three John Deere dealerships near the Saskatchewan border. They were moving to the New Holland dealer.
Barry Nelson, manager of public relations with John Deere in Lenexa, Kansas, said as independent business managers, the decision to carry other short-line products is up to local dealers.
But he said, “If a dealer wants to carry another brand of tractor we want them to do that in a different facility.
“We encourage them to sell and promote the full green line. The guideline is if we make it, we would sure like our dealers to carry it.”
But Kay said the company is not as liberal as it says. While they haven’t got in a “shoving match,” John Deere wants its dealers to promote John Deere products.
“They want us to drop our competing lines.”
Another John Deere dealer said the company strictly enforces its green-only rule.
“If there’s something on here that’s not green, the block man’s here telling us to get it off,” he said.
Gerry Bourgeault, president of Bourgeault Industries of St. Brieux, Sask., said many equipment dealers are feeling greater pressure to drop his company’s equipment.
“This is a serious situation that needs to be brought to the attention of the farmers.”
About 90 dealers across the West handle Bourgeault equipment. So far the company has lost only one dealer, but it has been forced to change dealers in several towns. In Medora, Man., the dealer sold the New Holland franchise and kept the Bourgeault equipment.
Bourgeault said luckily there are still independent dealers and others like Agco and Caterpillar willing to handle its equipment: “Fortunately we’re big enough to support a dealership franchise with other short lines.”
Calls to Morris Industries, another prairie short-line manufacturer, were not returned.
Historically, major manufacturers have not focused on the needs of farmers on the Canadian Prairies because of the small market size compared to the United States.
The large multinationals seldom introduce innovative seeding and other farm equipment specially built for the western Canadian market, said Bourgeault.
Larry Schneider, of the Prairie Implement Manufacturers Association, said it’s becoming a serious issue.
“We’re finding more are walking away from short lines with great reluctance.”
Industry officials have appealed to the federal Bureau of Competition in an attempt to stop the non-competition clause contained in many large manufacturers’ contracts with Canadian dealers.
