One of the five big grain terminals at the Port of Vancouver will soon
have a new owner.
And chances are, it won’t be a Canadian company.
Agricore United last week gave up its year-long battle with the federal
Competition Bureau and agreed to sell one of its three Vancouver
terminals.
Neither the bureau nor AU officials would comment on potential buyers
or the timetable for the sale.
However, grain industry observers said last week they doubt if any
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Canadian-owned company could afford to make such a purchase.
“It would have to be a multinational,” said University of Manitoba
agricultural economist Daryl Kraft. “I expect those assets are worth a
lot of money.”
David Schroeder, grain industry analyst with Dominion Bond Rating
Service, said the most likely candidate would be a foreign-owned
company that is already a player in the Canadian grain market.
“For example, a company like Louis Dreyfus has quite sizable country
operations but no west coast terminal, which is all-important,” he said.
Some of the smaller Canadian companies – like N. M. Paterson and Sons,
Parrish and Heimbecker, or the network of farmer-owned inland terminals
– might like to own an export facility, but the cost is likely to be
prohibitive, he said.
The merger of Agricore and United Grain Growers last year left the
newly created Agricore United holding a 51 percent ownership stake in
three terminals that accounted for 63 percent of the Vancouver’s grain
handling capacity.
That attracted the attention of the Competition Bureau, which ordered
the company to sell either its UGG terminal or its 70 percent stake in
Pacific Elevators. The company also owns half of Cascadia Terminal.
AU refused to comply, offering instead to sell Pacific 1, one of three
separate structures that make up the Pacific Elevators complex.
The case was referred to the Competition Tribunal, which was to begin
hearings in Vancouver Oct. 21. But on Oct. 17, the two sides announced
they had settled the case, with AU agreeing to sell either UGG or
Pacific Elevators as originally demanded by the bureau.
Brian Hayward, chief executive officer of AU, declined to comment on
the deal, other than to say the company is satisfied with the outcome.
Richard Taylor, the bureau’s assistant deputy commissioner of
competition, said the bureau was determined from the outset to bring in
a new independent player to preserve competition at the port.
“We took this case very, very seriously and we’re very happy with the
remedy we got,” he said, adding grain farmers should benefit as a
result.
However, National Farmers Union executive secretary Darrin Qualman said
the ownership of one grain terminal is irrelevant to the problem of
increased concentration of ownership in the grain industry.
“It’s just fiddling around the edges,” he said.
In a related development, AU announced last week that it had bought
Saskatchewan Wheat Pool’s 30 percent stake in Pacific, giving it 100
percent control.
That frees the company to put Pacific Elevators on the market without
the complicating factor of Sask Pool’s interest in the facility. The
pool had complained to the Competition Bureau that forcing AU to sell
all or part of Pacific could violate contractual arrangements between
AU and the pool.
