Competition concerns loom over Lakeside plant deal
February 23, 2009
by Bryan Salvage
MANITOBA – If the sale of Alberta's Lakeside beef packing plant to XL Foods is approved by Canada's Competition Bureau, the National Farmers Union said C.C.B. must provide the public with detailed justification on such a decision. The N.F.U. addressed the proposed acquisition in a letter to the bureau. The pending deal would result in the sale of Lakeside, the Brooks, Alta. facility owned by Tyson Foods, to XL Foods, which is owned by Alberta's Nilsson Bros. Group, for $107 million, the Manitoba Cooperator relayed.
"At a time when family farm cattle producers are shouldering devastatingly low prices, the proposed sale involves Canada's largest packing plant," wrote N.F.U. board member Dave Lewington. "Moreover, approving the sale would extinguish any residue of competition in the Canadian beef packing market -- moving us from just three dominant packers to two."
Mr. Lewington charged the sale would result in two companies (XL and Cargill) possessing more than 80% of the Canadian beef slaughter capacity and 95% of capacity for fed/finished cattle.
The N.F.U. has been urging the Canadian federal government to block the Lakeside deal, or to order the Nilssons to divest their cattle production assets if the sale is approved, since last summer.
N.F.U. also wants to see the bureau's information on "projected shifts in the allocation of revenues and profits among the various links in the cattle/beef chain" from cow-calf producers through to retailers, as well as "information on how the bureau's decision relates to abuse of dominance provisions" in the Competition Act.
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