Competition Bureau asks Competition Tribunal to order the grain company to sell a newly acquired elevator in Manitoba
A federal tribunal is expected to decide later this year if Canadian grain-handler Parrish & Heimbecker should be required to sell its newly acquired grain elevator in Virden, Man., as suggested by the commissioner of the Competition Bureau.
In late 2019, the Competition Bureau filed an application with the federal Competition Tribunal, seeking an order to have P&H sell the Virden elevator as a means of ensuring a more competitive marketing environment for grain growers.
The Virden elevator, previously owned by Louis Dreyfus Canada, was acquired by P&H as part of a larger deal that saw P&H take over a total of 10 Louis Dreyfus elevators in Western Canada last year.
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In a news release dated Dec. 20, the Competition Bureau said it was seeking a divestiture order in an effort to protect competition for farmers located near Virden.
With the acquisition of the Virden facility, P&H now controls two elevators along a 65-kilometre stretch of the Trans-Canada Highway, the Competition Bureau said.
P&H also owns an elevator in Moosomin, Sask., which used to compete with Louis Dreyfus Virden for farmers’ grain, the Competition Bureau contends.
“The two elevators closely monitored each other’s wheat and canola prices and responded to competitive activity … by offering farmers betters prices,” the Competition Bureau said.
“The acquisition (of Louis Dreyfus Virden) eliminates this rivalry. As a result, farmers in the corridor between Moosomin and Virden will earn less for their wheat and canola.”
But in a response dated Feb. 3, P&H denied that the Virden acquisition “creates, enhances or maintains” an anti-competitive environment for grain sellers.
“There is no basis for … a divestiture order because the acquisition (of Louis Dreyfus Virden) does not substantially lessen or prevent competition,” P & H lawyers said.
The Competition Bureau’s allegations are “based on a misunderstanding of the grainhandling industry,” P&H added.
Competition Tribunal chair Denis Gascon has suggested a hearing in October or November.
Gascon rejected a Competition Bureau request that the hearing be expedited, suggesting that an October or November hearing would give the bureau and P&H time to schedule necessary discovery and pre-hearing work.
“There is a profound disagreement between (P&H and the Competition Bureau) on the complexity of the issues raised by this application…,” Gascon said.
John Heimbecker, chief executive officer for P&H, declined to comment on the issue until after the tribunal hearing has taken place.
The other nine Louis Dreyfus elevators acquired by P&H last year are located in Tisdale, Sask., Wilkie, Sask., Aberdeen, Sask., Kegworth, Sask., Rathwell, Man., Joffre, Alta., Lyalta, Alta., Rycroft, Alta., and Dawson Creek, B.C.
