Grain firm Parrish and Heimbecker aims to keep its now-expanded Prairie elevator network intact against a proposed order from federal antitrust regulators.
Winnipeg-based, privately-held P+H in September announced a deal to buy all 10 of the primary Prairie grain elevators built by agrifood giant Louis Dreyfus Co. between 1998 and 2003. The two companies have since closed that deal.
However, the federal Competition Bureau in December said it would ask the federal Competition Tribunal to make an order requiring P+H to sell either its own elevator at Moosomin, Sask., or the Dreyfus elevator P+H now owns about 60 km east, near Virden, Man.
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The Moosomin and Virden elevators “were close competitors due to their proximity” along the Trans-Canada Highway, the bureau said at the time, as the companies “closely monitored each other’s wheat and canola prices and responded to competitive activity from each other by offering farmers better prices.”
The deal “eliminates this rivalry,” meaning “farmers in the corridor between Moosomin and Virden will earn less for their wheat and canola,” the bureau said.
According to documents filed Jan. 13 by the Competition Tribunal, P+H contends there’s no evidence of any alleged imminent harm to farmers, other than allegations by the bureau that the company says “are based on a misunderstanding of the grain handling industry.”
Or, as the tribunal put it, “there is a profound disagreement between (P+H and the bureau) on the complexity of the issues raised by this application and on a number of other fundamental matters, such as the main commercial imperatives underlying the grain handling business.”
(The Competition Bureau is the agency responsible for investigations and enforcement under Canada’s Competition Act. The bureau also decides whether to bring cases before the Competition Tribunal, which has federal jurisdiction to hear cases and make orders.)
In its Dec. 19 application, the bureau also asked the tribunal to allow an “expedited” process for this case, in order to have a hearing and a decision from the tribunal in place before the 2020 harvest.
But after a case management conference on Jan. 9, the tribunal on Jan. 13 turned down the request for an expedited process.
‘Not unreasonable’
Writing for the tribunal, chairman Justice Denis Gascon cited P+H’s concern that a sped-up process would create an “informational advantage” for the bureau.
As Gascon put it, P+H contends that the bureau “has already had the benefit of reviewing three expert reports” which the company submitted as part of the review process — whereas “relevant data” will still be coming in from third parties before a hearing and the bureau hadn’t yet provided any such reports of its own.
P+H also proposed a slightly less sped-up timeline and a hearing sometime in October and/or November this year, a period the tribunal describes as “after the harvest season.”
The bureau, Gascon wrote, “has not satisfied the tribunal that the alternative timeline proposed by P+H is unreasonable, unfair or impractical.”
Thus, the tribunal’s Jan. 13 decision calls for the bureau and the company to schedule discovery and pre-hearing steps that would bring the bureau’s application to a hearing in October/November.
Proposed timelines, Gascon wrote, should be filed by Feb. 17 and both parties are “strongly encouraged to include the mediation option” in setting up those timetables.
No other Dreyfus or P+H elevator was mentioned in the Competition Bureau’s December application to the tribunal — although six of the 10 Dreyfus sites are about an hour’s drive or less from at least one other P+H elevator.
Of those, the closest geographically are at Tisdale, Sask., where P+H has its own elevator as well as a Dreyfus facility. — Glacier FarmMedia Network
