GLADSTONE, Man. – Garry Patterson has never delivered a bushel of grain to United Grain Growers.
But he doesn’t want to see the company swallowed up by Manitoba Pool Elevators and Alberta Wheat Pool.
Stranger still, Patterson is vice-president of the local association that owns the MPE elevator in this town of 1,000 about 45 minutes northwest of Portage la Prairie.
Gladstone is one of 18 towns in Manitoba boasting both a UGG and Manitoba Pool elevator, and that helps explain Patterson’s vociferous opposition to the takeover bid.
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“UGG’s done me a lot of good just by being there,” he said last week. “We need more than one company. I think it’s a rotten idea.”
Competition is a word being used often by UGG’s corporate leaders to justify their all-out fight for survival.
And it was a word used often by farmers in this two-elevator town as they talked last week about the hostile takeover bid that has rocked the grain industry
Even though the aging UGG elevator is expected to be shut down in a few years anyway, there didn’t seem to be a lot of enthusiasm for the pools’ offer to buy UGG shares for $13.75.
Most identified themselves as either a pool or UGG supporter, but said they often do comparison shopping before delivering grain or buying fertilizer or chemicals.
And many said they didn’t understand the details of the takeover attempt and hadn’t yet decided what to do with their UGG shares.
Sitting at the window table at the Welcomestop Cafe on the edge of town, Rod Anderson and Weldon Fehr shared a cup of coffee and an opinion about the fate of UGG.
“I think it’d be real bad,” said Anderson, a 36-year-old producer and local UGG delegate. “Once there’s no competition, then they can just give you whatever deal they want.”
Fehr agreed, saying farmers in Gladstone know first-hand the benefits of having more than one company trying to buy their grain.
Just the day before, he had phoned the two elevators and discovered the pool was paying 10 cents a bushel more for feed wheat.
“I’ll walk across the road for that,” he said. “If you don’t get what you want at one place, you can go to the other. That’s what competition does and if they take that away, it’s too bad.”
Townsfolk say Gladstone has a small group of die-hard pool supporters, another small group of die-hard UGG customers, and a big group in the middle who will take their business wherever they can get the best deal.
No bitterness
But the strong words and bitter feelings that have surfaced during the public debate about the takeover bid are conspicuously absent from conversation at coffee shops and grain elevators in Gladstone.
“This community isn’t big enough to take sides,” said Fehr.
People are more concerned about the survival of their community than about any corporate rivalries, said town clerk Louise Blair.
Blair, who also farms, said she and husband Hugh will deliver to either company depending on space and other competitive factors and thinks many others in town agree: “I think people like to have that choice.”
Blair laughs that the pools and UGG have probably spent more money sending her information on the buyout offer than her shares are worth. But she said they won’t be selling their shares.
Patterson, the local MPE vice-president who strongly opposes the takeover, says he’s kind of sorry he has no UGG shares, but not so he could sell them for a profit.
“I wish I had a quarter million dollars of shares so I could tell them where to put them,” he said.
Patterson’s views aren’t shared by the president of the local pool association, Tom Otto, who supports the takeover bid and doesn’t worry much about competition issues.
“Personally I don’t think it’s a big deal, because I don’t use the competition anyway,” he said. “Elevator consolidation is happening anyway and we have less and less competition all the time.”
